Will Rising Interest Rates Also Propel Upward Movement In Commercial Real Estate Cap Rates?

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Interest-rate hikes from the Federal Reserve are expected this year. One key question still being debated by the commercial real estate industry: What do rising interest rates mean for capitalization rates?

One of the most commonly used valuation measures in commercial real estate, cap rates are determined by dividing a property’s net operating income by its current market value. Cap rates are often used to compare the rates of return on commercial properties, and also give insight into how much risk a property may carry.

Since the pandemic, cap-rate compression has been observed, especially, in white-hot sectors like industrial and multifamily.

There’s not a one-to-one correlation between cap rates and interest rates, although economists say the expected hikes coming this year could have some influence on where cap rates go in 2022.

Brian Bailey, commercial real estate subject-matter expert at the Federal Reserve Bank of Atlanta, said in a discussion this week hosted by commercial real estate software company Altus Group Ltd. that a rise in cap rates is prompted by many variables. But the prospect of rising interest rates does create risk for higher cap rates.

The risk associated with higher cap rates depends, too, on loan-to-value ratios at origination, Bailey said. Movement in cap rates in an 85% loan-to-value scenario creates a much greater risk of loan default, he said. In fact, any commercial loans that have an LTV ratio of 75% or greater may need to be closely monitored.

Bryan Doyle, managing director of capital markets at CBRE Group Inc., said during the Altus Group panel that the amount of capital waiting on the sidelines to be deployed into real estate should help keep cap rates stabilized, if not further compressing.

In fact, in a five-quarter period ending in the third quarter of 2021, long-term interest rates rose by more than 70 basis points while cap rates for industrial and multifamily compressed by 50 and 75 basis points, respectively, in the same period, CBRE said in a December report. Investors will have to consider whether an increase in cap rates will be offset by higher rents that’ll produce higher net operating-income growth, CBRE noted.

The office sector may be one to watch because of the significant, pandemic-induced changes it’s likely to see, Tim Savage, clinical assistant professor at New York University’s Schack Institute of Real Estate, said at the Altus Group discussion.

“That will impact NOI, and we know that will, therefore, impact cap rates,” he continued. “I would say, (probably), there will be slight upward pressure on cap rates going forward. They are not divorced from interest rates or, especially, from the Fed’s asset buying.”

 

Source:  SFBJ

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2021 CRE Investment Hit A Record $746B

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CBRE released its 2021 US commercial real estate investment volume and announced a record $746 billion, up by 86% from 2020. The fourth quarter of 2021 also saw a record $296 billion, increasing 90% year over year.

For a pre-pandemic comparison, volume in 2019 was $542.4 billion, down 1.8%, and Q4 that year was $152.7 billion, down 8.1% year over year.

There’s been a lot of evidence throughout 2021 that the annual tally would be spectacular, with pandemic rebounds, volumes of cash sloshing over the sides of bank accounts as they looked to be invested, and concerns about inflation and the need for hedging. But it’s good to remember that these factors also drove up prices and that the actual deal volume could be different.

Multifamily was the hot sector in 2021 at $136 billion for the fourth quarter and $315 billion for the year, giving it a 45.9% share of the quarter and 42.2% of the year.

For the whole of 2021 across all types of investment, industrial had a 21.5% share; office, 18.3%; 9.9% for retail; and hotel at 5.7%.

By market, greater Los Angeles was at the top. Investment volume there was $58 billion, with New York coming in second at $49 billion and the $41 billion in Dallas coming in third. The fastest growth was in Las Vegas, where $9.7 billion was a 231.8% year-over-year increase. Houston saw 190.5% growth overall at $25.8 billion, while South Florida’s $27.9 billion was a 178.6% jump.

Multifamily saw the fastest growth in Las Vegas, with a 394.3% year-over-year jump. Next was Houston at 379.0% and South Florida’s 240.3%.

In office investment, the top three regions for growth were Austin (410.4%), Richmond (359.5%), and South Florida (277.7%).

Growth rates in industrial were lower, which may owe to the massive rush to build and spend in 2020 during the pandemic, raising the question for investors of whether growth could continue to lag, or if it might be a case of prices topping out to some degree. Top three regions: St. Louis (144.9%), Sacramento (143.8%), and Austin (142.5%).

Year-over-year retail investment was generally higher than industrial, with Seattle seeing 248.8%, Phoenix at 217.8%, and Houston, 210.6%

Volumes of hotel investment were overall lower, but the growth was remarkably higher in Seattle (1612.0%), Tampa (1284.8%), and Florida’s panhandle (1181.3%).

Big sources for cross-border investment were Canada’s $20.9 billion and $15.2 billion from Singapore. The two countries were far and away the biggest sources.

Final quarter numbers on cap rates show that the “everything is driving lower and lower” discussion might be over reactive. Even warehouse industrial saw cap rates of 5.47, not the “threes” many suggest as averages. Multifamily caps were lower, but still in the high fours. The highest: hotels and an average 8.33.

 

Source:  GlobeSt.

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Ron Osborne Recognized As Top 5 Producer

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Irvine, CA-based Sperry Commercial Global Affiliates announced its Sales Recognition Awards for 2021 on January 25th.

Ron Osborne of Sperry Commercial Global Affiliates / RJ Realty was recognized as a Top 5 Producer within the network.

Osborne specializes in representing Seller’s of Office, Retail, Industrial and Automotive Properties in South Florida.  He also will represent Buyers on an exclusive basis.

Currently, he has a 25,000-square-foot office building and a 21,000-square-foot retail plaza available for sale.

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Spirit-Frontier Merger Could Leave South Florida Headquarters Up In The Air

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When the decision comes down on whether Spirit Airlines’ corporate headquarters will remain in South Florida, it will likely happen 2,000 miles outside of the tri-county area.

“We’ve got a delegation ready to fly to Denver,” said Bob Swindell, president of the Greater Fort Lauderdale Alliance, Broward County’s leading economic development agency.

The Alliance and Broward Mayor Michael Udine are prepared to go to Colorado to make their case to keep Spirit’s high-paying corporate jobs here. They’ve mobilized just days after Denver-based Frontier Airlines (Nasdaq: ULCC) and Spirit (NYSE: SAVE) announced a $6.6 billion merger transaction that encompasses debt, including a $2.9 billion purchase price for Spirit. Frontier would own a 51.1% interest in the new corporation.

A selection committee led by Frontier Chairman William Franke will determine where the newly formed company would be based, following expected regulatory approvals on the deal. If the committee rules in favor of Denver being home to the combined companies’ main base of operations, it could potentially mean a loss of high-paying jobs in the region. A decision won’t be announced until either June, or when the deal is expected to close.

“The average wage is higher in corporate offices whether it is legal, accounting, or financial jobs,” Swindell said.

Meanwhile, Spirit — currently based in Miramar — will still move forward with the construction of a new office complex in Dania Beach, a corporate spokesperson told the Business Journal.

Spirit is expected to relocate its headquarters there in 2023. Until then, the company leases 56,000 square feet at 2800 Executive Way and an additional 15,000-square-foot facility at 2844 Corporate Way, both in Miramar. Those leases will expire in January 2025, according to the company’s most recent annual filing with the U.S. Securities and Exchange Commission.

The lease for its 26,000-square-foot expanded office at 2877-2899 N. Commerce Parkway in Miramar is expected to expire in February 2024.

For its Dania Beach move, Spirit purchased an 8.5-acre parcel for $41 million in the fourth quarter of 2019 and also entered into a 99-year agreement to lease a 2.6-acre parcel of land, where it’s in the process of building the headquarters campus for over 1,000 employees. It broke ground in January 2021 with an expected completion date of fall 2023.

Spirit’s plan for its mixed-use complex at Dania Pointe would include up to 500,000 square feet of office space, a 103,000-square-foot flight simulator, and 200 corporate apartment units. The first phase of the complex is being constructed on the land Spirit bought, at the corner of Bryan Road and Radiant Drive. Spirit also stated it would hire an additional 225 people between 2022 and 2026 for the new corporate outpost.

What’s more, landing the Spirit-Frontier headquarters could mean even more corporate jobs in the area.

The merger will enable both companies to add 10,000 more jobs nationwide, and “thousands of additional jobs at the companies’ business partners,” a Spirit spokeswoman stated.

 

Click here to read more about this story.

 

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The Office Market May Be Turning a Corner

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There’s some good news for the office market, according to Transwestern. In the company’s 2021 Q4 review, there was quarterly office absorption of 644,000 square feet, which the company described as “turning a corner,” as “33 out of 51 tracked markets registered positive net absorption as market correction is underway.”

The five areas with the biggest increases in net absorption were in Boston, San Jose-Silicon Valley, Dallas-Fort Worth, Seattle, and Charlotte. When looking at trailing four-quarter net absorption, the top five were Austin, Raleigh-Durham, San Jose-Silicon Valley, Oklahoma City, and Nashville. About 30% of the markets that Transwestern tracks showed positive net absorption over the previous 12 months.

Seattle, San Jose-Silicon Valley, Charlotte, Austin, Salt Lake City and Raleigh-Durham had all been experiencing an expansionary trend, meaning positive net absorption percentage of office space before the pandemic.

The December job numbers were up 199,000, with about a quarter of them being office-using jobs. That segment of employment was up 1% to 46.8 million, so the number of people potentially needing someplace to work is on the rise.

But there are still strains evident on office space. For one, there’s still an ongoing recovery that has taken wind out of the sails of the market from both the ongoing pandemic with new variants, people and businesses still adjusting to broader working from home, and macroeconomic factors like inflation and supply chain issues pushing up property values but also imposing greater costs on companies.

The Q4 national average vacancy rate crept up 10 basis points to hit 12.6%. That includes demographic shifts from north to south, which means that there is likely some duplication in office space as new units are built to house the shifting companies without necessarily having someone to backfill the old space.

There were 152.7 million sq. ft. under construction in the quarter, which was up 3.1% quarter over quarter, but down 9.1% year over year. That would seem likely due to uncertainty about the market and the large amount of space already available. Why build more when so much could be had?

The asking base rent saw 2.1% annual growth to $25.72 per sq. ft., below the five-year average of 3.3%. Some traditional powerhouses were hit. “The largest, densest and most developed markets have historically commanded significantly higher rental rates, yet pandemic-related trends have diminished these markets’ lead,” the report read. “Since the beginning of the pandemic, the two most expensive markets, San Francisco and New York, have experienced the largest declines in rental rates at -19% and -9% respectively.”

According to Transwestern, “Markets with strong tailwinds prior to the pandemic may be better positioned coming out of the downturn” when looking at three-year net absorption percentage of stock.

 

Source:  GlobeSt.

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These Are The Asset Classes Most Resistant To Inflation

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Inflation is the risk factor investors are watching the most closely this year—but each property type has unique nuances in terms of how it interacts with inflation.

That’s according to John Chang, senior vice president and director of research services at Marcus & Millichap. He says office properties have general inflation resistance because their values tend to align with replacement costs and they mark to market upon tenant turnover. Some properties may also have inflation escalators built into lease agreements.  On a scale of 1 to 10, with one meaning little to no inflationary risk, Chang ranks the office sector risk at a three to a five.

Multi-tenant retail falls in the same category, he says, thanks to long-term lease agreements that could have escalators tied to sales. Single-tenant properties typically don’t have such escalators, but the risk depends on the tenant he says; Chang ranks them in the three to five range as well.

Seniors housing market-rate units can recalibrate on turnover, and government programs like Medicare or Medicaid also typically adjust to inflation. The sector has the ability to mark to market so the inflation risk rating is in the three to four range.

Medical office inflation risk is low, Chang says, in the two to four range. Meanwhile, the multifamily and self-storage sectors have tremendous inflation resistance since their rents mark to market frequently.

The most inflation resistant CRE property type—with the ability to change rates every day—is hotels, at the one to two range.

“Periods of high inflation tend to be relatively short—a few years or less,” Chang says. “This shouldn’t be a primary commercial real estate investment driver but it could nudge investor decisions a bit. Real estate is generally a long term investment with multi-year hold periods, so while you factor in inflation and other short term risk, investors need to keep their eyes on the horizon.” 

 

Source:  GlobeSt.

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Rents Creeped Up, Vacancies Fell Across South Florida At Year-End 2021: Report

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Monthly home rents are rising sharply across South Florida, with some communities seeing as much as a 34% annual increase in December compared with a year ago.

While locals largely blame the wave of newcomers to the Miami and Fort Lauderdale areas, experts say there are solutions: build more apartments priced affordably for the working class and companies should boost wages.

Residents here are contending with the perfect storm. There’s been a steady migration in the pandemic of people coming from states with higher wages and cost of living who view Miami apartments as a deal, many firms are relocating to South Florida and there’s a pipeline of apartment buildings where rents range from $1,800 a month to $2,800 for studios and one-bedroom units.

“We have had very few affordable apartments,” said Jack McCabe, owner of McCabe Research & Consulting, a real estate and economic research firm in Deerfield Beach. “People (from the Northeast and Midwest) consider $2,200 for an apartment a great deal compared to where they are coming from. They also have more cash in the bank than people in Miami do. People in Miami can’t afford this, because their salaries are not going up as high.”

Zillow, an online real estate marketplace, reported that rents rose annually in the tri-county area — Miami-Dade, Broward and Palm Beach counties — to an average of $2,564 in December, up 30%. Real estate brokerage Redfin said in Miami apartment price tags soared year over year to an average of $3,020 monthly in December, a 34% jump.

South Florida’s annual rent hikes exceeded that of New York City and Atlanta, but the asking rates fell in the middle. According to Zillow, New York City had an average rent of $2,772 in December, up 16% from a year ago. Atlanta had an average rent of $1,882, up by 22%.

Rent increases show zero signs of subsiding in this region, experts say.

McCabe said people living in older rental homes also are seeing price increases of 8% to 12% a year.

“It’s still significant, because their income hasn’t gone up 8% to 12%,” he said. “Many people are struggling with their housing cost. Many are paying 50% (of incomes) for their housing expenses. It leaves little or nothing for a car, vacation, kids or even playing a round of golf. It has cut into their lifestyle.”

On the other hand, the area’s home sales market provides little relief to prospective buyers, with steady price increases for houses and condominiums. Miami-Dade County has a median sales price now of $525,000 for houses and $355,000 for condos, while Broward has a median sales price of $500,000 for houses and $236,000 for condos.

Inventory of homes for sale is limited, too. Miami-Dade has two months of supply of houses to buy, and 3.3 months of condos. Broward has 1.1 months of houses on the market, and 1.7 months of condos. A balanced housing market typically consists of six to nine months of inventory for sale.

“For now, buyers are showing up to a store where the shelves have been picked clean and the buyers are fighting over the last loaf of bread,” said Jeff Tucker, a senior economist at Zillow.

Priced-out buyers in Miami will continue to rent, experts say. Many will look to live in the urban core, including Brickell, downtown and Edgewater, where many firms are opening offices. The urban core is experiencing a resurgence of activity in recent months after renters exited these neighborhoods early in the pandemic that began in March 2020, to find homes with more square footage and green space.

Experts say to alleviate the burden of higher rents on consumers more development of affordable and workforce housing and wage increases are necessary. McCabe said the Miami area needs 40,000 affordable housing units, thousands more than what’s in the pipeline in Miami-Dade and the city of Miami.

The reality is expect more transplants coming to South Florida, said Jeff Andrews, a data journalist at online real estate marketplace Zumper, and that means more rent increases this year.

“You still have a housing shortage and renters are still looking to move to their new pandemic reality, because they didn’t in 2020,” Andrews said. “Homeowners did. Renters don’t have the capacity to pick up and move whenever they want. They have to wait, plan for a deposit and save up.”

The list of expected newcomers includes 29-year-old Keyao Pan, a Florida International University history professor. After completing a yearlong post doctorate fellowship at Harvard University, Pan will relocate to Miami this summer.

“FIU is a great place, it does a lot of research,” said Pan, who holds a doctorate from University of Chicago. “I can count myself very lucky, because I know people who had a 10-year gap when they graduated and then they had a stable job.”

He pays $1,400 a month for a 700-square-foot studio apartment in Cambridge, below the $3,637 monthly average for a one bedroom in the Boston area, according to a December Redfin rental report. He hopes to find a 1,000-square-foot, one-bedroom unit for $1,500 a month near the FIU main campus in west Miami-Dade or in nearby Doral. If he can swing it, Pan said, he wants to buy a home with family help for less than $350,000.

“Both Chicago and Cambridge have a higher cost of living,” he said. “Miami is still more affordable than places in the Northeast. It is a growing market.”

Also, investors are swooping in to Miami and Fort Lauderdale areas, buying condo units and then getting high monthly rents for them. South Florida renters may finally get price relief in 2023, McCabe said. That’s because home sellers in the Northeast looking to move south may have a tough time unloading their houses or condos, because they will follow so many people from that region that already have exited, he said.

“The big question,” McCabe said, is “will we see more people moving to South Florida” in 2023 to keep boosting apartment rents.

 

Source:  Miami Herald

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How Increased M&A Activity Is Affecting Corporate Real Estate

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Last year, merger and acquisition activity increased significantly, and experts expect the momentum to continue in 2022. Real estate is the second or third largest expense on a company’s balance sheet, making it a top priority during a corporate merger. Companies undergoing a merger or acquisition will not only look to consolidate a real estate portfolio, but they will also look at operations, leases and technology.

Rob Raymond, a managing director in the Real Estate practice at FTI Consulting, has seen real estate account for as much as 16% to 22% of general and administrative expenses.

“It is a large target of synergy,” he tells GlobeSt.com. “From a physical footprint perspective, companies would look at redundant locations and consolidating headquarters.”

Cost is typically the primary metric that companies look at when consolidating a portfolio, but access to talent is also crucial.

“Companies are also looking at talent in addition to cost. [A company might choose] real estate that is more expensive but will have better access to talent,” says Raymond.

After consolidation of redundant or excess space, companies will look to reduce operational costs related to real estate.

“If a company is outsourcing facilities management and they are increasing the size of their portfolio, they will look for an opportunity to go back to those vendors and negotiate better pricing.”

Likewise, Raymond says that companies are also reassessing costs related to leasing and facilities management technologies.

Work-from-home policies adopted during the pandemic are adding a layer to real estate needs during a merger. To start, the companies could have a disparity in cultures.

“One company may be trying to return everyone to the office, while other companies might be empowering employees to work in a way that is best for them,” says Raymond. “There is always that cultural conversation that happens.”

Companies need to figure out what employees need and what culture will best align with the workforce. In addition to employee needs, work-from-home has made it challenging for companies to assess their office space needs due to work-from-home policies.

During a company carve-out, there are also legal guidelines to follow when combining offices. For this reason, Raymond recommends a thorough legal review as early as possible, particularly when dealing with international footprints.

“Some companies require employees to be physically separated, other companies allow employees to share the same space,” he explains, adding there are also issues of intellectual property to consider, even when companies can legal share a space. “Having that understanding as early as possible will really drive the real estate decisions.”

 

Source:  GlobeSt.

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Higher Inflation Means More Competition For CRE Assets

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Supply chain problems, labor shortages, and the housing shortage are all fueling inflation to eye-popping levels – and for CRE investors, that will mean greater competition for assets.

Headline inflation is up 7.1% from last year, the biggest uptick since 1982. And that rising inflationary pressure is forcing the Fed to switch gears and tighten policy. This will in turn put upward pressure on interest rates, raising the cost of capital for CRE investors, says Marcus & Millichap’s John Chang.

Supply chain is the first contributing factor to inflationary pressures: “It’s hard to move products from the manufacturers to the customers,” he says, pointing to shortages in raw materials, limitations on foreign port capacity, shipping container shortages, backlogs at domestic ports like those in Los Angeles and Long Beach, and a shortage of trucks.

“Basically, people want to buy more stuff than our supply chain can handle right now, so there are shortages and that means prices go up,” he says.

Retail sales are up 16% over 2019 numbers, while the amount of product moved by trucks in the US is down 5.1% over the same period.

The second issue? Labor shortages, which continue to stoke inflation.

Quite simply, “the US has never experienced a labor shortage like this,” Chang says, “at least not in the last 22 years, when records have been kept. As a result, companies are competing for personnel, and that’s driving up wages.”

Average hourly earnings are up 5% over last year, and sectors like accommodations and food services have seen labor cost increases of more than 15%. And “rising wages create broad-based long-term inflation,” Chang says.

The third challenge is the housing shortage: there are not enough houses to buy or apartments to rent right now, and the problem will likely continue at least in the near term. There are currently about 1 million houses for sale in the US right now, about two months’ worth of supply; typically, four to six months’ worth of supply is required to maintain stability in the market.  Housing prices shot up 14.9% last year in response to the shortage.

In addition, there are only about 480,000 apartments available for rent, a vacancy rate of 2.6%, the lowest on record. Rents rose 15.5% last year.

“The Fed will be taking action to curtail the rising costs,” Chang says.

He notes that Fed Chairman Jerome Powell has already announced plans to accelerate the end of quantitative easing that was put in place during the pandemic, and says this will likely put upward pressure on long-term interest rates. The overnight rate is also on track to increase three times or more this year, which will put upward pressure on short term interest rates.

As a result, Chang says, interest rates are likely to continue to rise. The ten-year Treasury rate is already up about 30 basis points from the beginning of December to a little over 1.7%.

For investors, this will equate to more competition.

“Commercial real estate is viewed as one of the best places to invest money during periods of high inflation, especially properties that can increase rents with the market, like apartments, hotels, and self-storage properties,” Chang says. “Rising interest rates, and increased investor demand, implies that levered yields will compress this year. Basically, more commercial real estate buyer competition will push cap rates lower while the cost of capital, or interest rates, rise. That means CRE levered returns may tighten.”

But several property types still offer higher yields, like well-positioned office assets, retail assets, medical office buildings and some hotels, he says – and properties in softer markets harder-hit by COVID restrictions could also offer higher yields and stronger multi-year returns.

 

Source:  GlobeSt.

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South Florida Counties Among The Hottest Commercial Markets In The U.S.; They’re Also Less Affordable To Live In

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Miami-Dade County tied with six other markets with populations over 250,000 for having the strongest commercial real estate market conditions in the nation, according to a study released today from the National Association of Realtors.

Miami-Dade tied with census metro divisions covering Tampa, and Fort Myers in Florida with an index of 76, the highest score achieved by communities of more than 250,000 people. Also scoring 76: Charleston, South Carolina; Durham, North Carolina; Kennewick-Richland, Washington; and Nashville, Tennessee.

Gay Cororaton, senior economist and director of housing and commercial research for NAR’s research group, said index points are awarded when an area outperforms the national average on criteria such as job growth, employment, salary growth, inventory absorption, and low vacancies/rent increases in apartments, offices, retail, and industrial. The highest possible index score of 100 is only awarded when a metro area “outperforms” the nation on every single indicator, Cororaton added.

Although not scoring 76, several other Florida metro areas with large populations, including Broward and Palm Beach counties, had high index points. Palm Beach County scored 72, which tied it with Florida regions that included Jacksonville, Naples, Port St. Lucie, and Orlando. Broward County had an index of 68.

Additionally, the vast majority of Florida’s metro divisions above 250,000 people received indexes higher than 50, Cororaton said. Exceptions were the Tallahassee and Panama City areas, which each received indexes of 48; and Sebring, which scored 47.8.

“If you are over 50, you are performing ahead of national conditions,” Cororaton said. “Florida is doing really well.”

In the past year, Florida was second only to Texas in population growth, rising by 211,196 residents to more than 21.78 million people from July 1, 2020 to July 1, 2021. Local real estate analysts credit the migration of people and businesses from other parts of the U.S. – in search of lower taxes, minimal regulation, and better weather – for South Florida’s uptick in residential and commercial rents, which are higher than the national average.

This migration has contributed to making South Florida an even less affordable place to live. In the fourth quarter of 2021, Miami-Dade renters spent an average 22.9% of their income on rent, Broward renters spent 23.4%, and Palm Beach County renters spent 27%. Across the U.S., renters spent an average of 16.3%.

Residential rents continue to rise, too. The average effective monthly rent for 4Q 2021 in Miami-Dade was $1,997, an increase of 19.6% from the previous year; in Broward it was $2,075, up23.2%; and in Palm Beach County $2,273, a hike of 31.9%. Nationally, the average monthly rent in 4Q 2021 equaled $1,543, an increase of 12.2%.

At the same, sales transactions of multifamily buildings, and prices, are rising faster than the national average, the report noted. Additionally, all three counties had apartment vacancies lower than the national average of 4.6% with Miami-Dade’s vacancy rate at 3.5%, Broward’s at 3.1%, and Palm Beach County’s at 4.1%.

The NAR report noted that all three South Florida counties had job creation in the 4Q of 2021 stronger than the national average. Miami-Dade posted a 6.2% increase in non-farm jobs, a 4.3% increase in Broward, and a 5.1% increase in Palm Beach County than the year before. The national average was 4.1% higher than the prior year.

It was more mixed within South Florida in terms of unemployment and salaries, though. NAR reported that Miami-Dade’s wages increased 6% from the previous year to $1,004 a week, and recorded an unemployment rate of 5.1%. In Broward, wages went up 2.8% to $1,019 a week with an unemployment rate of 4.3%. In Palm Beach County, average wages went up 1.8% to $970 a week while its unemployment rate was 4%. Nationally, average wage growth went up 4.8% to $1,080 a week, while the unemployment rate was 4.2%.

In non-residential commercial sectors, the NAR report stated that the office, industrial, and retail markets of South Florida’s three counties were stronger than the national average, with each posting lower vacancy rates and higher absorption rates in all three sectors than the averages of the rest of the United States. The report did note that industrial and retail sales transactions in Miami-Dade didn’t rise as fast as the rest of the nation, while in Broward and Palm Beach industrial and retail traded at a faster rate. In Palm Beach County, offices traded more slowly than the national average.

 

Source:  SFBJ

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