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Market Report

Fort Lauderdale Office Investment Forecast

2020 Outlook

New Supply Hampers Broward County Top-Tier Office Fundamentals; Class B/C Shines

 

Construction cycle sets new high watermark, weighing on Class A fundamentals. Developers more than double the pace of supply growth this year, applying upward pressure to vacancy in the top tier. Pre-leasing stands at less than 50 percent, and Class A vacancy rests well above 15 percent entering 2020, which will test the market’s ability to attract and retain tenants in the near term. Competition for tenants also comes from nearby South Florida markets Miami and Palm Beach, where top-tier vacancy is elevated. Nonetheless, the long-term outlook remains bright in Broward County. Spirit Airlines, for example, recently announced a $250 million headquarters in Dania Beach that will house 1,200 employees, while Sunshine State Health committed to nearly 150,000 square feet in Plantation during the second half of last year. In the Class B/C sector, vacancy is closer to the 12 percent range. Only Cypress Creek faces a significant supply overhang entering the year.

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