The Dixon-Magenheimer-Sisler Report Semi-Monthly Newsletter

Your Fair Share of Real Estate Taxes

If you live in Florida and own property, you will receive a TRIM (Truth in Millage) notice in the next 4 to 6 weeks. This notice will give you an estimate of the real estate taxes that the property must pay, based on the assessment and millage rate. The assessment is established each year by the County Property Appraiser using mass appraisal techniques. The millage rate is based on funds the city and county government need to operate. The real estate taxes for a property is then calculated by multiplying the assessment – say $100,000 times the millage rate of say 19 mills, which is really 1.9% or .019. This equals a tax of $1,900. I sometimes think that the use of the term millage rate is to confuse the taxpayer. It would be much clearer if it was expressed as a percentage of value.

As a taxpayer, you are only obligated to pay your fair share and the only part of the real estate tax equation which can be appealed is the assessment. With the decline in the market values of both residential and commercial properties from January 2008 to January 2009 the new assessment should be lower of the year of 2009 compared to the year of 2008.

However, because of the continuing need of the government for revenues it is possible that the millage rate will increase for the tax year of 2009. If the assessment for property declines by say 10% and the millage rate increases by 10% the final tax bill and revenues collected by government will be the same.

If you have property which has been enjoying the benefits of homestead exemption, your taxable or homestead exempt value may remain the same but with an increase in the millage rate you will have an increase in your taxes.

The TRIM notice you will receive at the end of August is an estimate of the taxes you will pay based on the government receiving the same amount of revenues in 2009 as in 2008. After you receive the TRIM notice, there is usually a period of 25 days to file an appeal petition if you wish to protest the assessment. Then, sometime in the next 12 months there will be a hearing before a Special Magistrate to protest the assessment.

If you object to the real estate taxes there are two proactive things you can do. One, attend the budget hearing at the City and County Commission meetings and tell government to stop spending so much money. Two, appeal your assessment.

As a property owner, you can file the appeal and present your arguments before the Special Magistrate. However, many property owners have found that using a professional is much more effective. With our 30 plus years of combined knowledge of South Florida real estate valuations as real estate brokers, professional appraiser, teacher and economic analysts, we are well equipped to represent property owners in the successful appeal of real estate tax assessments.

CALL US WE KNOW THE APPEAL PROCESS

Tom Dixon 305-443-4966

After you receive your 2009 assessment visit our Tax Appeal Page and fill out the form at the bottom if you want us to review your assessment.

Where are the tenants?

Last Friday, I attended with 130 other professionals the presentation of the Official 2009 Annual Miami Office Market Report by the Commercial Industrial Association of South Florida, (CIASF).  Data for the report was based on information from Black’s Office Guide.  The report was prepared and presented by my two able office mates, Tom and Andrew Dixon.  There was also a panel of office leasing professionals sharing their views of the office market and presenting estimates for the remainder of 2009 and 2010.

As an office leasing professional in South Florida for over 30 years acting as both a tenant and landlord professional broker representative, to me the glass is always half full.  This market for the foreseeable future will be soft and stagnant, with higher vacancies, lower rents and greater concessions by landlords to keep existing tenants and attract new ones, particularly in the Downtown and Brickell Districts.

When the new office buildings hit the market in 2010, the Miami-Dade office market will have a total close to sixty million square feet of rentable space.  Where are these tenants going to come from?  The CIASF report shows that the number of businesses with more than 100 employees have shrunk to less than 300.  Landlord/Developers building high-rise structures with large floor plates will find that users are few and far between for their space.  Only larger tenants can efficiently use large floor plans.

The economy of South Florida is based on three structures holding up our communities; tourism, finance/trade and construction.  Construction will not be a factor in the near term and tourism does not create a significant office demand.  A majority of the office space I have leased is in Coral Gables, home to multi-national tenants based here to service their Latin American businesses.  They are not large users of office space.  Typically, they will occupy 1,500 to 2,500 SF.  Some landlords are aware of this requirement and have tailored their marketing programs in this direction.  Other landlords, many on Brickell Avenue and Downtown are still looking for full floor tenants.  Most of these will be large regional law firms that continue to see opportunities to locate to Miami/Coral Gables to service their international clients in Latin America.

So, where are we and where are we going, and better yet, how do we get there?  First, with few exceptions, new tenants to the market are going to be few and far between.  Landlords will have to offer huge concessions to attract them.  These will take the form of free rent, moving allowances and generous tenant improvement budgets.  A bit of history here, as the landlord’s representative in the Texaco Latin America-West Africa division lease for 72,000 SF in Coral Gables twenty five years ago, the lease provided an 18 month rental abatement on a ten year lease.  Plus, turnkey tenant improvements and free parking!  The effective rate was in the mid $20’s/SF and the face rate was in the low $30/SF.

Other that new tenants, landlords have to react to existing tenant needs to retain them.  Reduced rents, moving base year operating expenses pass-thrus and rent abatement will be the order of the day.  Otherwise we will see a massive game of “musical chairs” throughout the market.  With tenants moving from one building to the next for lower rents.

We will get “there” by having leasing professionals, landlord and tenant representatives educate and inform landlords on the market conditions that will require them to be receptive, creative and realistic to the current market circumstances.  Those that do, will enjoy reasonably full buildings, others will suffer vacancies of up to 50%! Remember, those in the business of office leasing have to believe the glass is half full and will stay that way.

CALL US: WE KNOW HOW TO KEEP THE GLASS HALF FULL

To view the 2009 Office Market Report go to www.dixoncommercialre.com click on 2009 Office Report

By: Steve Magenheimer

The Underwear Factor

THE UNDERWEAR FACTOR

Now that the summer rains have started in South Florida it reminds me that there are cycles to the weather, life, financial markets and it seems everything around us.   Three months ago we were commenting about the cool weather and when would it be warm enough to go swimming.  Now the water is warm and we wonder will the weather ever become cool again.

As hard as it is to believe the financial struggles we are going through will pass and the clock of financial markets will turn and the economic cycle will go from bad to worse and then start to get better.  My explanation for this is the “Underwear Factor.”  It could be called the bed-sheet factor, towel -factor or automobile tire factor.  Things will need to be replaced and no matter how long we wait to replace them they will eventually wear out.

The wear-out cycle for cars used to be three years, for copiers five years, for computers four years.  A good copier salesman would contact an office and ask “how old is the office copier.”  If the answer was two years he would set a reminder to contact the office in three years.  If the copier was more than five years old he had a good prospect for a new copier.

The result of this natural cycle is that some things are replaced because the technology has changed, other are replaced because they have worn-out and others because fashion and styles have changed.  Think about the things you use every day.  Eventually, they will need to be replaced.  As much as we hold off on buying new things eventually we must.  The “we must” starts the cycle over again and goods are produced to meet this demand.

For an example consider the automobile industry.  They produced cars with a life cycle of three to five years.  At the end of this period the paint failed, the body rusted out and mechanical parts need replacing. Of course, also the styles changed and we all wanted to stay in fashion.  The result was a continuing demand for new cars.  Then there was a change, car manufacturers started producing better cars than last six-seven or even ten years before they need to be replaced.  This reduced the demand for cars by 50% but I guess the manufacturers never figured this out.

Now let’s look at the current economic cycle.  Beginning in the summer of 2007 the overbuilt and over financed real estate market began to collapse.  This meant that homeowners had less equity to obtain loans, employment declined, consumer spending declined and the “Economic Clock” started to wind down.  Hopefully, the “Clock” will start to rewind when the “Underwear Factor” comes into play and consumers will need to buy more goods.  The decline in home prices will end and with lower prices more buyers will move into the market.  It will be a slow process because of the excesses of the past several years, but it will happen.

How long will it take to rewind the “Clock”?  I’m reminded of the statement of my real estate professor in college, “housing is the hand maiden of the GNP.”  The real estate and housing market has brought the economy down and it needs to recover before it can bring the economy up.

WE WILL LET YOU KNOW WHAT TIME IT IS ON THE ECONOMIC CLOCK

By Tom Dixon

The Benefit of this Real Estate Cycle

As an active real estate broker in South Florida the changes I have seen in the market for real estate are both upsetting and beneficial.

The upsetting part began in 2005 and 2006 when money was so plentiful that almost any borrower could qualify for a loan.  These borrowers realized that if they could purchase property with 100% financing and the value of the property went up they made an infinite return on their “investment.”  In fact, this looked so good that many buyers-speculators purchased multiple properties solely with the intent of reselling them at a profit.  This led to groups of individuals buying and selling to themselves at ever increasing prices.  Using these systems condominiums appeared to be doubling in value in less than a month.  As the prices increased this drew more and more speculators into the market.

How was all this possible?   Easy money based on loans without income verifications, credit reports or proof of ability to repay.  Some of these loans were called “NINJA” loans (No Income No Job or Assets).  Who provided these loans?  Mortgage brokers wrote these loans, they were sold to a wholesaler, who sold them to an investment bank.  The investment bank packaged them and resold them to investors.  Everyone made a profit and hoped that they could resell the loan before the borrower missed a payment.  The problems started when the “NINJA” borrower stopped making the payment because he could not flip or resell and did not have the income to make the payment.

Jump to mid-2006, the impact of this speculation and false demand was residential construction and speculative building not seen since the early 1970’s.  All of this buying and selling at ever increasing prices created an apparent wealth from real estate ownership.

Housing became so expensive most of the residents in South Florida did not have an income to cover the cost of housing. Of course this also led to higher taxes and insurance premiums because of the apparent increase in values.  The chain started to break in mid-2007 when foreclosures increased, construction spending declined and unemployment started to rise.

The beneficial part of this cycle is that the cost of housing has declined and more families should qualify to obtain home loans, real estate tax assessments will decline and insurance premiums should decline because of lower insurable values.  As the real estate market stabilizes and the existing inventory is occupied the market will recover.  If history is a guide we have had similar real estate booms and busts every 10 years.  The first real estate bust I experienced was in the early 1970’s and they repeated on a ten-year cycle.

When all of the new proposed financial stimulus packages are funded I predict a new round of inflation. It may take two to three years but the trillions of dollars being funded by the government will bailout the economy and bring on a new round of inflation. This in turn will help the banks with increases in the safety and the value of real estate loans. This inflation will raise the price of everything including fixed assets such as real estate.  My recommendation is that if we have a new round of inflation then the best investment you can make is to buy fixed assets such as real estate with a long-term, low interest rate loan which can be repaid with inflated dollars.

Call us we have been through the Cycles

By Tom Dixon

January 2009 – CIASF Industrial Market Report

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Last week Andrew and I presented the 2009 Miami-Dade County Industrial Market Study to over 240 members of the Commercial Industrial Association of South Florida.  This is 14th year we have reported on the industrial market conditions in South Florida.

The Market Trends Section reported a growth in industrial space for the year of 2007 of just over 2,000,000 SF a decline of about 10% from the prior year.  This downward trend was also evident in the industrial employment sector showing an employment decline of 2,500 to a total employment of just over 182,600.  For the year of 2008 projected total freight at the Port of Miami declined by 6% while freight through Miami International Airport remained the same.

The Market Activity Section shows a decrease in the volume of warehouse sales from 144 in 2007 to 74 in 2008 and a decline in the average sale price from $85/SF to $71/SF.  The industrial condominium market also slowed with a volume of 349 in 2007 to 167 in 2008 and an average price decline from $149/SF to $144/SF.

Because of the variety of warehouse/industrial properties in various locations Miami-Dade County is divided into seven regions based on similar types of properties in each region.  All regions are reporting an increase in the amount of rental space available, an increase in the vacancy rate of 2% to 5% and rental rate declines of $2.00 to $4.00/SF.

Summary

  • Landlords are accepting lower rents and are offering short term leases, free rent and property renovations.
  • Operating expenses are stable with declines in insurance premiums offset by increases in real estate taxes.
  • Sales prices will depend more on income potential with sales prices declining from 20% to 25% in some areas from the peak in 2005-2007.
  • On the positive side the weak US dollar has encouraged the expansion of international trade increasing the demand for warehouse space.  In addition, land which was to be used for residential development is becoming available for future industrial development.  However, due to the decline in rental rates and difficulty of obtaining financing new construction will decline for the next several years.

If you’d like more information about the “Commercial Industrial Association of South Florida” send an e-mail to iadc@bellsouth.net or you can view and download the entire Market Report on our website www.dixoncommercialre.com

By Tom Dixon

December 2008 – Holiday Thoughts

Gary Sisler’s —-Holiday Thoughts

Most of us have experienced seeing real estate recessions and bounce backs…but, this one seems more serious, perplexing and sobering. We would like to think that the savvy pundits would be more evident in hoisting warning flags. It seems to say that we are ill served by the press which has so few trained to write with any meaningful experience with economics.

Globalization—we now learn that our economy is entwined with global influences. Global investors were attracted to our packages of high yield mortgages. Ratings of those packages overvalued their credit strength. Greed on Wall Street is difficult to regulate yet alone monitor.

Politics has not helped prudent real estate investors. Fannie Mae and Freddie Mac, encouraged by Congress became such an important player Congress could not let it falter. We need to understand that there is a price-penalty to pushing the purchase of houses with scant regard for adequate down-payment and verification of the borrower’s ability to pay.

For the older part of the population this is going to translate into much more conservative spending and investing habits. What does all this mean? Hang on, it certainly looks like 2009 is going to be a wild ride. However, for this Holiday try to forget the negatives as best you can and spend more time with your families. Love for each other should not be affected.

Steve Magenheimer’s— Holiday Thoughts

This holiday newsletter written a week or so before Christmas can be a reflection of the year past (2008) or it can be a projection of what we believe 2009 will bring.

In a year of credit crisis; the largest bank failure in US history (Washington Mutual) and the largest bankruptcy (Lehman Brothers) and a national election that elected the first African-American to become president of the US, it is difficult to predict that 2009 will be a peaceful year. In spite of the recent shoe throwing incident at President Bush, the war in Iraq is virtually over, and the US has a reliable (?) ally in the Middle East to help stabilize the region. Afghanistan will be a challenge for the new administration to say the least.

Most pundits say 2009 will see more of the same failures, foreclosures, bankruptcies, etc. As an individual commercial real estate broker, specializing in office leasing and investment sales, there is little I can do to effect change, beyond staying positive and making the right verbal confessions. But if I continue to do the same things as in the past, and they are no longer working, I am a fool.

So at TMC we look to the New Year with anticipation. Conditions may worsen before they improve; we are not at the bottom yet. It is not important to know when the bottom is reached and the upturn starts, let the experts do that. What is important is how you react to the process and what adaptations you employ to not only survive, but prosper.

God Bless All, Merry Christmas and a Happy New Year. And, when you give thanks this season, bless and ask the Lord to watch over our brave troops in Iraq and Afghanistan.

Tom Dixon’s —Holiday Thoughts

For the past several days Miami has been enjoying cool clear weather which is so different from the rainy, hot weather during the summer. And, just as it is pleasant now I can guarantee that in 6 months it will be summer time and the rain and heat will return. This cycle of weather is natural and we all accept this cycle of change.

Now that we are in the middle of very severe recession I think it is time to look forward and consider what I call the “Clock of Real Estate” but could just as easily be called the “Clock of the Economy.”

The clock starts at noon with an oversupply of real estate..

this leads to increasing vacancies which leads to ….

declining prices which leads to declining construction…

following this will be low vacancies followed by….

increasing prices which encourages …

more construction…

finally we are back again with oversupply…

and the cycle repeats itself.


Change the words from real estate to cars and you see the same pattern. What this tells us is that there is an economic cycle just like there is a cycle to the weather. As hard as it is to believe that it will be hot this summer I can guarantee that it will be hot this summer. By the same token I can assure you that we are going through an economic cycle and sometime in the future we will realize that the hands on the “Clock of the Economy” have moved and we have gone full cycle.

Andrew Dixon’s —Holiday Thoughts

What happened to 2008? It’s seems like just yesterday that people were sleeping on street corners in lines ready to drop down 20% on their third condo unit on South Beach, like they were buying tickets to the concert of the century. Today million dollar CEO’s are sleeping outside Congress waiting for their chance to beg for a loan. It’s been a pretty amazing year as we’ve slid from one end of the economy to the other. Or have we? In some respects I think the general populace is still living in denial of what is happening around us. Perhaps eventually we will accept that not everyone deserves a mortgage, or a new car every 2 years. When the make-believe money that created the credit-crisis gets taken away, which it must, the effects will be brutal, but until then I’m still getting credit card offers every day. The powers that be are seemingly willing to spend every dollar Congress is willing to give them out of your tax pocketbook in order to maintain real estate prices (not values) that were built on smoke and mirrors (fraud and un-sustainable lending practices.) And likely just when we feel the worst is over, and the storm has passed, we’ll all walk outside to realize it was just the eye of the hurricane. Luckily we Floridians are used to this concept. I apologize for the negativity, but I don’t believe the recovery will be nearly as fast as the fall.

November 2008 – Living The Borrowed Dream

For the past several years we have been living on a borrowed dream. When we wanted something we would just “put it on the card.” Then if at the end of the month if we did not have the money we just paid as much as we could and let the balance accumulate at 20% interest. This living on a borrowed dream included the purchase of houses, second homes, boats, clothes, appliances and in some cases even food using credit in the form of mortgages or credit card debt.

Where did the money to make these loans at 20% interest come from? Some of the money was from banks, pension funds and money market funds but I suspect a large amount of the funds were from foreign lenders such as China and the Middle East. We were borrowing from them to purchase the goods that they created. However, the money we borrowed to enjoy the good life has to be repaid and that is the problem. We all have heard of the problem of home owners owing more on their mortgages than their property is worth. Well, some homebuyers took a gamble that if the property value went up they would win and if the value went down then the bank would lose. Guess what, that is exactly what is happening now. But the loser may be you, me, foreign lenders and the Federal government.

Over 50% of our economy is based on consumer spending and probable 80% of consumer spending involves credit cards. If merchants are concerning about the lack of desire in purchasing consumer goods for the holidays just imagine what will happen when Mr. Smith decides to make a purchase and the credit card company says….Mr. Smith you have exceed your credit limit and your credit card is no longer valid. When this happens our system of living the borrowed dream will come to an end. Our system of rewarding borrowers and penalizing savers will come to an end. The outcome of this will mean less consumption and spending but I’m not sure this is such a terrible outcome. I believe it was Benjamin Franklin who said. “Happiness is spending less than you earn”

Tom Dixon

August 2008- I Think My Phone is Broken

What a strange title for a newsletter?  Why would one think his phone is broken?  It is not ringing, sometimes not at all, other times very seldom.  Why do you think this is occurring during the dog days of August 2008? There are several reasons for this state of affairs and we will discuss them and see what we can do to remedy the situation, correct the lack of activity and plan for it not to happen again.

First, the simple truth is people do not use their business phones as much as before.  Email is the major method of communication, providing a record on the computer and even a hard copy if downloaded and printed.  You need to know, however, that the law treats an email message as an oral communication.  If you need a written message, download, print and mail the email to the person with whom you want to establish a written record.

Second, the current economic “correction” has reduced activity in the real estate market place to a dribble of its former flow.  The writer leases high rise office buildings for a living and activity in the market I work is slim or non-existent.  For example, a beautiful penthouse office space, full floor, private elevator lobby, private lavatories, separate meter for electricity, five large office, conference room with a wet bar with gorgeous views of downtown near the edge of the Gables.  This sublease has been offered at the low rate of $32/SF with few takers.  Now it is being offered at the mid-twenties, net of electricity and the phones are still not working.  Are they broken or are we at a standstill in our office economy?

Next, could one of the reasons the phone does not ring is we are not doing a good job of marketing the space.  Building signage, new flyers to target specific portions of the sublease, broker contact, open house for brokers are some of the traditional methods of marketing sublease office space.  We are now taking some less traditional avenues to fix our phone.  One approach is developing mailing lists from directories of specific professions such as law, accounting, small business, architects and bankers.  Direct mail has historically been a low response method, but it will only take one to win the day.

Since office leasing is very broker driven in the South Florida market, a very generous commission split has been structured for the tenant representative that brings a deal.  Also, the master landlord for the building indicated he will entertain a new lease for the sub-tenant for a term beyond the sublease term and will pay a commission to the tenant representative broker.  The stage is set for the achievement of the objective: the sublease of the penthouse at such a dynamite price.  Incidentally, the sub-landlord will provide new carpet and paint for the “right” subtenant.

Need we say more?  The broken phone will be fixed.  Call will be received from qualified prospects.  The sublease will occur.  Time will overcome and fix my broken phone.

CALL US WE KNOW HOW TO FIX PHONES THAT DON’T RING – Steve Magenheimer

July 2008 – Real Estate Taxes

If you live in Florida and own property, you will receive a TRIM (Truth in Millage) notice in the next 4 to 6 weeks. This notice will give you an estimate of the real estate taxes that the property must pay, based on the assessment and millage rate. The assessment is established each year by the County Property Appraiser using mass appraisal techniques. The millage rate is based on funds the city and county government need to operate.

The real estate taxes for a property is then calculated by multiplying the assessment – say $100,000 times the millage rate of say 19 mills, which is really 1.9% or .019. This equals a tax of $1,900. I sometimes think that the use of the term millage rate is to confuse the taxpayer. It would be much clearer if it was expressed as a percentage of value.

As a taxpayer, you are only obligated to pay your fair share and the only part of the real estate tax equation which can be appealed is the assessment. For non-homestead property, the tax year of 2008 is very important because the Florida Constitution was changed to limit the increase in the assessment from year to year. The following is an extract of the new assessment procedure for non-homestead property.

Assessments of non-homestead property shall be changed annually on the date of assessment provided by law; but those changes in assessments shall not exceed ten percent (10%) of the assessment for the prior year. …. such property shall be assessed at just value as of the next assessment date after a qualifying improvement …such property shall be assessed at just value as of the next assessment date after a change of ownership or control and …changes, additions, reductions, or improvements to such property shall be assessed as provided for by general law….

There are serious unintended consequences of this amendment. For example, over time – as the difference between the assessed value and the just value increases – fewer and fewer property owners will be motivated to sell and fewer buyers will be interested in buying because of the impact of the increase in assessment and taxes after a sale. The next problem will be the lack of motive to upgrade, change or improve property because again, this will cause a re-assessment of the property. However, this is the Florida Constitution and unless it changes, you should take advantage of these benefits.

With the general decline in real estate values from land, condos, single family homes to income properties, the year 2008 is the best opportunity to lock in the low valuations so that in future years as the real estate market improves, your assessment and real estate taxes will be at a minimum.

After you receive the TRIM notice, there is usually a period of 25 days to file an appeal petition if you wish to protest the assessment. Then, sometime in the next 12 months there will be a hearing before a Special Magistrate to protest the assessment. As a property owner, you can file the appeal and present your arguments before the Special Magistrate. However, many property owners have found that using a professional is much more effective.

With our 30 plus years of combined knowledge of South Florida real estate valuations as estate brokers, professional appraiser, teacher and economic analysts, we are well equipped to represent property owners in the successful appeal of real estate tax assessments.

CALL US — WE CAN MAKE SURE THAT YOU ARE ONLY PAYING YOUR FAIR SHARE OF REAL ESTATE TAXES.

by Tom Dixon


June 2008 – Office Market Report

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On June 13th, real estate brokers, Tony Puente, Robert Meneses and I presented the first Annual South Florida Office Market Report to over 120 members of the “CIASF” Commercial Industrial Association of South Florida. This report provides a snapshot of the Office Market Conditions for the year. For research purposes Miami-Dade County is divided into 7 regions and information for each region was provided. This information includes a description of the region, office rental rates, example of a typical lease, a typical office building sale and a typical condominium office sale. Included with each example was a complete description of the building and a photo.

Here from the report is the summary of Office Market Conditions for 2008:

· The office leasing and investment sales market is healthy, but there is a yellow (cautionary) flag waving in the wind. Demand/absorption of new space is expected to be flat or negative for 2008 with some tenant growth in legal, accounting and insurance companies, but a significant decline in demand from financial, mortgage and real estate companies.

· With no significant deliveries of office space in 2006 and 2007 up to 4 million SF of office space will be delivered over the next 12-30 month with three large buildings in the Downtown/Brickell corridor and eight in the Doral and surrounding areas. Adding to the rental supply are some condo office buildings reverting to “for lease” buildings creating a hybrid-building ownership situation.

· The leasing market will remain active with up to 20% of leases expiring in the next two years. Also, as rental rates rise to $50/RSF large tenants will seek less expense alternative locations. In addition, the “for sub-lease” market will continue growing and offer alternatives to tenants.

· Demand for office investments by institutions remains strong and will continue. However, price expectation by buyers has changed significantly with higher capitalization rates, difficult debt and finance markets resulting in lower prices.

After the information on transactions in each region was presented, I provided my analysis of the future “Supply and Demand for Office Space” for Miami-Dade. For the current demand analysis I multiplied the number of employees in the Department of Labor categories, information, finance and insurance, real estate, professional services and management by a factor of 325 SF per employee. This represents an indicator of the demand. For future demand I projected a 2,000 per year increase in employee in these categories. For the existing supply analysis I totaled the adjusted area of all office buildings in Miami-Dade over 5,000 SF. This information was from the Public Records available at the office of the Property Appraiser. For future supply I projected an annual increase in office space of 500,000 SF except for 2009 when 3,500,000 SF is expected to be put on the market. The difference between supply and demand is the vacancy rate. This rate is projected to increase above 12% in 2009 and if the assumptions are correct decline in future years to a more typical rate of 8% to 9%.

If you would like to view the entire presentation in a downloadable and printable format you can go to www.dixoncommercialre.com and click on the CIASF Office Market Report in blue at the bottom of the page or you can go directly to the report if you click on this link:

2008 South Florida Office Market Report Link

For information to join the Commercial Industrial Association of South Florida contact Nick Kallergis Executive Director at 305-443-6233.

CALL US. WE HAVE THE FACTS AND FIGURES TO HELP YOU MAKE REAL ESTATE DECISIONS.

by Tom Dixon