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South Florida Commercial Real Estate Market Shows Slow but Steady Improvement

South Florida Commercial Real Estate Market Shows Slow but Steady Improvement

Moderate Growth Expected for Office and Industrial Sectors through 2013;
Uptick in Investment Sales Mirrors National Activity

PR Newswire

MIAMI, April 5, 2013

MIAMI, April 5, 2013 /PRNewswire/ -- Newmark Grubb Knight Frank (NGKF), one of
the world's leading commercial real estate advisory firms, shared its view on
the South Florida commercial real estate market at the company's 2013 State of
the Market event on April 4, 2013. The outlook was presented to clients at a
reception featuring keynote speaker Robert Bach, national director, Market
Analytics, as well as a number of NGKF market specialists.

(Logo: )

Based on the company's proprietary research, market fundamentals have remained
relatively steady over the past quarter across South Florida. The office
vacancy rate fell slightly across the board, with Broward County ending the
quarter with the lowest level in the region at 16.1%. The industrial sector
also performed well, with vacancy inching downward in both Broward County and
Palm Beach. Miami recorded quite a bit of activity; however, vacancy remained
relatively flat due to the delivery of the 335,000-square-foot Miami
International Distribution Center.

"Across South Florida, over 1.1 million square feet of office leasing activity
was tracked in the first quarter," said Jon Bourbeau, vice chairman in NGKF's
Miami office. "The majority of deals came from tenants already in the market
in the form of expansions, renewals, relocations and, in some cases,
contractions, but the pendulum appears to have swung with demand outpacing

As a result of this market improvement, and the fact that new development
across South Florida has been kept in check, asking rents for both office and
industrial product are expected to increase moderately over the next several
quarters, and landlords will feel less compelled to offer leasing concessions
as the year progresses. Still, stronger signals of widespread economic
recovery are needed before robust growth takes hold.

Mr. Bach explained that improving market fundamentals, especially job growth,
retail sales and the housing market, bode well for commercial real estate on a
national basis, and said that South Florida in particular is benefiting from a
rebound in the residential sector.

"The spike in demand for residential real estate is a harbinger of stronger
growth on the commercial side," Mr. Bach said. "This is especially true for
retail, as homeowners look to remodel existing properties or homebuilders
deliver new projects."

Activity in South Florida's investment sales market has been fueled by
competitive, long-term low interest rate financing and a continued demand for
yield by investors. This is true across a variety of product types, such as
multifamily, retail and office.

"The pending purchase of 1111 Brickell Avenue by Principal Global Investors
underscores the fact that South Florida is attracting global private and
institutional capital," said Michael Lapointe, executive managing director,
NGKF Capital Group.

The region's hospitality sector remains one of the strongest in the country.
Over a 10-year period, the compounded annual growth rate in RevPAR is one of
the highest in any major domestic city as Miami continues to move toward
becoming a true 12-month market. Improving fundamentals coupled with
longer-than-average hold periods are producing high per-key valuations.

Another property type that will continue to attract investors both locally and
nationally is healthcare real estate. Todd Perman, executive managing
director, Global Healthcare Services, explained how the Obama administration's
Affordable Care Act is having an impact on this sector and the effect it is
likely to have on South Florida.

"Healthcare currently makes up 18 percent of the gross domestic product, and
due to a growing and aging population, this figure is expected to increase to
22 percent, with 30 million new patients entering the market over the next
several years," Mr. Perman said. "This trend will fuel demand for healthcare
properties, and prompt healthcare organizations to aggressively explore cost
reduction strategies and efficiencies."

For more information about NGKF's outlook for the South Florida commercial
real estate market or to obtain full reports for Miami, Palm Beach and Broward
County, contact Mira Matic at 973.461.9005.

About Newmark Grubb Knight Frank

Newmark Grubb Knight Frank is one of the world's leading commercial real
estate advisory firms. Together with its affiliates and London-based partner
Knight Frank, Newmark Grubb Knight Frank employs more than 11,000
professionals, operating from more than 340 offices in established and
emerging property markets on five continents.

With roots dating back to 1929, Newmark Grubb Knight Frank's strong foundation
makes it one of the most trusted names in commercial real estate. Its
integrated services platform includes leasing advisory, global corporate
services, investment sales and capital markets, consulting, program and
project management, property and facilities management, and valuation
services. A major force in the real estate marketplace, Newmark Grubb Knight
Frank serves the local and global property requirements of tenants, landlords,
investors and developers worldwide. For further information, visit

Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a
leading global brokerage company primarily servicing the wholesale financial
and real estate markets. For further information, visit

Press Contact: 
Mira Matic 

SOURCE Newmark Grubb Knight Frank

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