The Covid-19 pandemic, among many other factors discussed in this report, have propelled a mass corporate migration to Miami-Dade County. Companies and people alike have been enticed to the County’s low tax policies, looser Covid restrictions, economic incentives, and lower overall real estate costs.
Over the past year, momentum has been building and a clustering of technology, financial, and wealth management companies has taken formation creating one of the largest emerging fin-tech hubs in the nation. You can read more about this formation in our Q1 2021 Miami-Dade County Office Market Report.
Explore Coconut Grove’s office and luxury residential market in part three of this six-part series.
Coconut Grove Office Market Overview
Coconut Grove, one of Miami’s oldest suburbs and premier residential neighborhoods, is situated along Biscayne Bay southeast of Miami’s central business district and east of the City of Coral Gables.
For many years, Coconut Grove had one of the tightest office markets with almost no Class A office space available and the lowest vacancy rates among Miami-Dade County’s submarkets. Until recently, there had not been any new office construction since the delivery of the SBS building in the 1980’s.
However, a resurgence of investment in the submarket fueled the development of multiple high-end condominiums, several new Class A office buildings and the repositioning of its retail properties.
As the suburbs became a favorable office market as a result of the pandemic, Coconut Grove did not suffer with negative absorption in 2020. Throughout the year, tenants continued to renew their leases including Mercy Hospital (26.5K square feet), John S. and James L. Knight Foundation (22K square feet), and Weinberg Wheeler Hudgins Gunn & Dial (13.4 square feet).
Furthermore, Class A office gross rental rates increased by 7.9% year-over-year to $60.34 per square foot in Q1 2021.
Coconut Grove Residential Market Overview
Given its proximity to downtown and plentiful residential offerings, Coconut Grove has been capturing a significant share of relocations to Miami-Dade. In Q1 2021, the volume of sales over one million dollars increased to 23 total sales transactions, compared to 16 in Q1 2020. By comparison, in the years of 2019 and 2020 there were only 17 and 23 closed sales, respectively.
Two of the most telling indicators of the strength of the residential real estate market are days on the market (DOM’s) and average sales price. In Q1 2021, the number of DOM’s decreased by 16% to 132 days for sales between $1 million and $3 million. Typically, anything less than 6 months of supply is a seller’s market. Furthermore, the average sales price per square foot increased by 17% year-over-year in Q1 2021.
While there were very few sales transactions above $5 million over the past three years, there were 4 sales transactions above $5 million in Q1 2021 alone.
- 16% decrease in DOM’s for sales transactions between $1 million and $3 million in Q1 2021 year-over-year.
- 27% increase in volume of sales activity for sales transactions between $1 million and $3 million in Q1 2021 year-over-year.
- 17% increase in sales price per square foot for sales transactions between $1 million and $3 million in Q1 2021 year-over-year.
- Of the homes sold in the $3 million to $5 million price range, the properties were only on the market for an average of 35 days.
Download the full report here.
About the Authors:
Verity Mosquera: Accomplished research analyst and project manager, Verity Mosquera, uses her experience in analytics, leadership, and international business to monitor the global economy and its impact on the commercial real estate market. She oversees research operations, manages a team of Research Analysts, and supports the company’s brokers primarily in the South Florida offices. Verity understands the needs of our clients and works to deliver top-notch market research and analysis to help them make the most informed real estate decisions.
Haley Boatright: As a Research Analyst in the Miami office of Colliers International South Florida, Haley supports the research needs of the Colliers South Florida team. She is responsible for providing information resources and research, and a platform of comprehensive commercial real estate market data. Haley is accountable for the preparation and writing of quarterly market reports in addition to assisting team members in ongoing and ad hoc research projects by providing market trend analysis and forecasting along with direct research support.