Broward County Office Outlook - Q4 2018

Fort Lauderdale Office Outlook
Year End 2018

South Florida | Q4 2018
Employment overview
Employment continues to grow, increasing 2.1 percent
since year-end 2017
Employment Update
• Despite the addition of 9,000 jobs in December, the
unemployment rate ticked up slightly to a still very low
3.3 percent due to increased labor participation. At
virtual peak employment, job growth is slowing but
continues to be positive.
• Slower growth is particularly evident in office using
sectors. The end of 2018 showed stronger gains,
particularly in the information sector, but year-over-
year aggregate office using employment growth has
averaged just 1.1 percent fort he year.
• A bright spot in employment continues to be the
construction sector, which grew 9.8 percent in 2018.
There are now 146,500 people employed in that sector.
While this is still below the peak of 168,300 in 2006, it
represents an outstanding recovery since bottoming
out in 2011 at 84,100.
• Naturally, leisure and hospitality also saw strong gains
along side peak tourism season.
0%
2%
4%
6%
8%
10%
12%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2005 2007 2009 2011 2013 2015 2017
Total Employment
Unemployment
Total jobs vs. unemployment rate
Office employment trends
(12-month change)
Job growth/loss by sector
(12-month change)
700
1,300
2,000
3,500
4,500
5,300
9,200
9,500
13,100
14,200
Total Government
Information
Financial Activities
Other Services
Prof. & Business Services
Manufacturing
Edu & Health Services
Leisure and Hospitality
Construction
Trade, Utilities & Transp
Number
of jobs
News on the street
(South Florida businesses expanding, contracting, etc.)
Cloudbanter | Technology
• Cloudbanter, a tech company that helps advertisers
target companies on mobile messaging apps, opened a
new office at 201 S. Biscayne Blvd.
• The company plans to add 30 new jobs in a wide range of
categories.
Cresset Wealth Advisors | Finance
• The Chicago based firm signed a lease for 8,000 square
feet earlier at CityPlace Tower earlier in 2018.
• The company is in the process of hiring 30 to 40 people in
as wealth advisors and technology specialists for the
firm’s mobile platform.
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
0.0%
2.0%
4.0%
6.0%
-10.0%
0.0%
10.0%
20.0%
2011
2012
2013
2014
2015
2016
2017
2018
Financial Activities
Information
PBS
Aggregate office using sectors (R axis)

Q4 2018
Office overview
Office Insight
A rather quiet 2018 no cause for concern for Fort
Lauderdale’s office market
Fundamentals Forecast
YTD net absorption -220,831 s.f. ▲
Under construction 847,495 s.f. ▲
Total vacancy 14.3% ▼
Average asking rent (gross) $34.31 p.s.f. ▲
Concessions Stable ▶
After six years of positive absorption, the Fort Lauderdale office market
showed some softening, as tenants gave back nearly 221,000 square feet.
Rather than large scale closures or downsizes, much of this was due to
tenants moving to more efficient spaces – shedding space not due to
business operations, but for improved workspaces and cut costs amidst
record high rents. This has been a trend nationally for quite some time now,
and the local market is finally seeing the effects. However, this fundamental is
not necessarily representative of the market’s performance, as landlords
remain confident going forward.
This confidence is evidenced by the development activity occurring across the
market. Fort Lauderdale has seen little development of late, but now there is
nearly 850,000 square feet under construction highlighted by The Main, Stiles
Realty’s 355,000 square foot office building at 201 East Las Olas. Strong
preleasing at the property is a prime example of the market's appetite for well
positioned new construction. The attraction to quality space has also
increased rents despite an increase in vacancy. Among Class A assets in the
market, rents have increased 15.8 percent year-over-year; furthermore, Class A
rents downtown are now averaging over $51.00 per-square-foot (full service),
which is in line with prime buildings in the Miami CBD.
Outlook
All signs point to a rebounding year in terms of absorption entering 2019.
Based on leases signed this year, we’re tracking nearly 200,000 square feet of
expected absorption through the first half of 2019. And while we anticipate the
move to efficiency to continue, we believe growth within local companies will
outpace the trend – at least through the first half of the year. We’ve already seen
sublease availabilities on the rise. That, coupled with slower office sector
employment gains of late may hinder long-term expansion plans later in
the year.
-500,000
0
500,000
2015 2016 2017 2018
Supply and demand (s.f.) Net absorption
Deliveries
16.0%
14.1%
12.6%
14.3%
2015 2016 2017 Q4 2018
Total vacancy
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
2015 2016 2017 Q4 2018
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Marc L. Miller | marcl.miller@am.jll.com
• The office market saw its first year of negative absorption since 2011.
• However, this is also the first year the market has seen significant new
development begin.
• There is still confidence in the market going into 2019, as rents continue
to rise and several large transactions late in the year will result in future
occupancy gains.

Broward submarkets
Fort Lauderdale CBD
Sawgrass Park
Southwest Broward
Cypress Creek
Plantation
Northwest Broward
Southeast Broward
*Northwest & Southeast Broward excluded from report.

Fort Lauderdale | Q4 2018
JLL Research Report
Office Statistics
Class
Inventory
(s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption (%
of stock)
Direct vacancy
(%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
Completions
(s.f.)
Under
Development
(s.f.)
CBD Totals 4,922,574 20,982 -60,164 -1.2% 13.3% 14.1% $46.92 0 557,318
CBD Totals 4,922,574 20,982 -60,164 -1.2% 13.3% 14.1% $46.92 0 557,318
Cypress Creek Totals 5,414,416 37,334 -21,547 -0.4% 20.2% 21.8% $26.19 0 0
Northwest Broward Totals 1,438,621 50,690 31,128 2.2% 10.9% 11.2% $25.20 0 0
Plantation Totals 2,522,902 20,773 -14,681 -0.6% 7.8% 10.9% $32.25 0 232,700
Sawgrass Park Totals 2,687,837 -5,978 -19,200 -0.7% 8.1% 9.3% $30.66 0 0
Southeast Broward Totals 2,051,325 -34,916 -122,945 -6.0% 16.4% 16.6% $31.41 27,744 286,577
Southwest Broward Totals 3,725,809 12,410 -13,422 -0.4% 9.1% 9.5% $33.23 56,710 0
Suburbs Totals 17,840,910 80,313 -160,667 -0.9% 13.1% 14.4% $29.12 84,454 519,277
Fort Lauderdale Totals 22,763,484 101,295 -220,831 -1.0% 13.2% 14.3% $34.31 84,454 1,076,595
CBD A 3,539,967 16,991 -26,418 -0.7% 9.8% 10.9% $51.10 0 434,398
CBD A 3,539,967 16,991 -26,418 -0.7% 9.8% 10.9% $51.10 0 434,398
Cypress Creek A 2,760,223 9,492 12,125 0.4% 19.7% 20.8% $29.19 0 0
Northwest Broward A 781,402 19,971 4,510 0.6% 12.9% 12.9% $26.73 0 0
Plantation A 1,527,563 2,265 -7,770 -0.5% 4.8% 5.2% $35.62 0 232,700
Sawgrass Park A 1,679,694 -7,884 -5,686 -0.3% 9.9% 10.5% $34.01 0 0
Southeast Broward A 534,732 -3,180 -40,960 -7.7% 17.1% 17.9% $33.39 0 286,577
Southwest Broward A 2,507,000 32,933 29,050 1.2% 9.9% 10.6% $33.96 56,710 0
Suburbs A 9,790,614 53,597 -8,731 -0.1% 12.5% 13.2% $32.24 56,710 519,277
Fort Lauderdale A 13,330,581 70,588 -35,149 -0.3% 11.8% 12.6% $38.79 56,710 953,675
CBD B 1,382,607 3,991 -33,746 -2.4% 22.1% 22.3% $37.89 0 122,920
CBD B 1,382,607 3,991 -33,746 -2.4% 22.1% 22.3% $37.89 0 122,920
Cypress Creek B 2,654,193 27,842 -33,672 -1.3% 20.8% 22.9% $24.14 0 0
Northwest Broward B 657,219 30,719 26,618 4.1% 8.6% 9.1% $23.97 0 0
Plantation B 995,339 18,508 -6,911 -0.7% 12.5% 19.6% $23.02 0 0
Sawgrass Park B 1,008,143 1,906 -13,514 -1.3% 5.3% 7.3% $24.49 0 0
Southeast Broward B 1,516,593 -31,736 -81,985 -5.4% 16.1% 16.1% $30.79 27,744 0
Southwest Broward B 1,218,809 -20,523 -42,472 -3.5% 7.4% 7.4% $29.54 0 0
Suburbs B 8,050,296 26,716 -151,936 -1.9% 13.9% 15.8% $25.62 27,744 0
Fort Lauderdale B 9,432,903 30,707 -185,682 -2.0% 15.1% 16.7% $28.27 27,744 122,920

Average asking rent $46.92 p.s.f. ▲
Q4 2018
Fort Lauderdale CBD
Office Insight
The big news for 2018 in downtown Fort Lauderdale is the ground breaking of
The Main, a mixed-use project along Las Olas that includes a 355,000 square
feet of office space, along with 20,000 square feet of retail and a 341 unit
multifamily building. Upon delivery in 2020, the project will be the first large
scale office tower built in 13 years, and the first new office space along Las
Olas since Bank of America Plaza came online in 2002.
The new project has garnered good interest, having signed three large
tenants so far – all of which will be relocating from properties along Las Olas
Boulevard. A total of 90,000 square feet of commitments have been
announced. In addition, CBRE leased 13,000 square feet at Bank of America
Plaza, and will also be relocating within the Las Olas competitive set. True
absorption, which was down for the year, should pick up with two other
sizable transactions. Spaces, which signed a lease for 32,000 square feet, will
occupy 501 E Las Olas when renovations are complete, and Techtronic
Industries, parent company of Milwaukee Tools, will be occupying their 12,300
square foot space at 450 E Las Olas in Q2 2019. These leases, along with
smaller expansions, should offset the downsizes and anticipated exits
occurring in the market.
With rents at record levels, along with industry trends, some tenants that
signed during the downturn have been opting to leave the CBD upon their
upcoming lease expirations, such as Sirote & Permott, Stemcor USA, and ATB
Law. While individually the footprint of these companies are not large,
collectively tenants of this size (below 5,000sf) represent roughly 45.0 percent
of all tenants located in the CBD (or 12.0 percent of all leased square footage).
We’ll be keeping an eye on this activity, particularly as another project is set to
deliver south of the River, which will be at a discount to most of the towers
downtown and will cater toward smaller users – particularly law firms.
-200,000
-100,000
0
100,000
200,000
2015 2016 2017 2018
Deliveries
Downtown sees first new tower break ground since
2005, adding significant availability to tight Las Olas
Corridor
12.6% 12.7% 12.9%
14.1%
2015 2016 2017 Q4 2018
Total vacancy
39.10
43.59 45.59
51.10
29.92 32.16 34.53
37.89
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
2015 2016 2017 Q4 2018
Class B
• The Main, Stiles Realty’s 375,000 square foot office tower broke ground
this year, the first since the AutoNation building began construction in
2005 (the project delivered in 2007).
• Several large leases were signed along Las Olas, but much of the activity
is tenants playing musical chairs.
• Rents continue to increase with the help of prime space coming on the
market, but smaller firms are starting to feel the pinch.
Note: 92,500sf of negative absorption in 2017 due to
building demolishes/renovations, not tenant move outs.

Under construction 0 s.f. ▲
Q4 2018
Cypress Creek
Office Insight
Cypress Creek has begun to show signs of life of late amidst of strong overall
market. Despite slightly negative absorption, rents continue to rise and tenant
interest in the submarket has increased. At a 10.0 percent discount to other
submarkets, even the steadily rising asking rates in Cypress Creek present
value to tenants – which has helped not only in retaining tenants, but also
attracting tenants from outside of the submarket.
In 2018, tenants opted for longer lease terms in an effort lock in value in a
county that has seen rents sharply rise recently, particularly in other parts of
the county. Since 2016, rents in Cypress Creek have risen 4.7 percent,
compared with an 8.9 percent increase for the remaining suburban
submarkets. As a high tide lifts all boats, tenants in 2018 looked to get ahead
of any sharp increases. The average term for a lease signed in 2018 in Cypress
Creek was just over 63 months compared to an average of 57.7 months for the
period between 2014 and 2017.
Further, given the value, a significant portion of the leasing activity in Cypress
came from tenants outside of the submarket. Nearly 30.0 percent of the
leased square footage in 2018 were new tenants to the submarket, and it was
a combination of tenants improving their space, or relocating for value.
This type of tenant activity is mirrored in investor interest. As other suburban
submarkets see pricing escalate, investors see similar value opportunity in
Cypress Creek. A prime example of this is Cardinal Point’s $47.5 million
purchase of Coastal Tower, the third largest suburban trade in 2018 (by total
dollar value). Two other Class A assets in the submarket are also likely to trade
in the coming months. This capital markets activity, as well as the general trend,
should boost rents in Cypress Creek in 2019, but the the submarket should still
be viewed as a cost effective option.
-100,000
0
100,000
200,000
2015 2016 2017 2018
Deliveries
The submarket’s stability and affordability are
attracting tenants and investors alike
21.1%
20.0%
19.7%
21.8%
2015 2016 2017 Q4 2018
Total vacancy
27.13 27.62 28.01 29.19
21.20 21.62 22.60
24.14
$0.00
$10.00
$20.00
$30.00
$40.00
2015 2016 2017 Q4 2018
Class B
• Lease terms increased in 2018, signifying tenants looking to lock in lower
rates, which have steadily been increasing.
• Leasing activity has been on the decline, but the submarket is capturing
more tenants from outside the submarket.
• One of the market’s most prominent sales transactions of 2018 occurred
in Cypress Creek, and more activity is likely as we enter into 2019.

Q4 2018
Plantation
Office Insight
Despite the occurrence of recent outsized deals being signed in the market,
Plantation’s bread-and-butter demand has traditionally come from smaller
tenants catering to the local population. But large deals may become more
prevalent thanks to the addition of large blocks of space on the market and
the submarket’s central location within the region.
The Plantation Walk Office, which was mired in legal and construction
problems, once again became competitive this year and saw the largest lease
of the year. Aetna, who will be relocating within the submarket, executed a
lease for 85,000 square feet and will be leaving their 120,000 square foot office
at 1600 SW 80th Terrace. This space joins Kaplan’s 120,000 square foot space
next door and Envisions 53,000 square foot sublease at the 1801 Building –
the three largest blocks on the market in Plantation.
Two other projects can have an impact on the market as well. Kelley
Kronenberg, currently located in roughly 43,000 square feet at Crossroads I, is
constructing a 34,000 square foot building. Also, University Professional
Center, a 64,000 square foot building, broke ground this year (42,000sf is
available). This influx of large availabilities may have more sizeable tenant’s
eying the market, particularly given the relative lack of large blocks in the
western suburbs - including these blocks, there are only 15 Class A
availabilities on the market over 20,000 square feet.
This past year was interesting for the market, as large blocks came online and
new construction began in earnest for the first time this cycle. The market is still
tight, with an occupancy rate of 89.1 percent, so these blocks may come as a
welcome sight for tenants looking for quality space in a centralized location.
Traditional demand should continue in 2019, and we expect a few large blocks
to come offline given the level of demand currently being tracked.
-100,000
0
100,000
200,000
2015 2016 2017 2018
Deliveries
New construction begins shifting dynamics as sublease
space increases
17.1%
15.2%
10.3% 10.9%
2015 2016 2017 Q4 2018
Total vacancy
34.06 32.66 34.50 35.62
23.43 24.48 23.86 23.02
$0.00
$10.00
$20.00
$30.00
$40.00
2015 2016 2017 Q4 2018
Class B
• University Professional Center broke ground this year, the first new
construction in Plantation since Royal Palm II delivered in 2007. This is in
addition to the repositioning/renovation of the 160,000 square foot
Plantation Walk building.
• Kelley Kronenberg is also constructing their own office building and will
be vacating about 43,000 square feet in the market.
• Large sublease spaces have hit the market in recent months, two of
which were leased within the past 18 months.

Q4 2018
Sawgrass Park
Office Insight
The uptick in vacancy and negative absorption would normally be considered
a cause for concern, but that is certainly not the case for Sawgrass Park. The
submarket has been impacted by general trends broadly effecting real estate
(i.e., densification), but the submarket is well positioned to mitigate such
downsizes. This is particularly true given the tenant profile, which tenants to
be weighted toward larger tenants. In fact, of leases executed for space 10,000
square feet and larger, 28.9 percent of those transactions occurred in
Sawgrass Park. That equates to 35.5 percent of all square footage leased for
that set of transactions, or 450,000 square feet – a large number given the
submarket is comprised of a total of 2.7 million square feet.
Further, these transactions will help drive vacancy down in the months to
come after increasing slightly in 2018. Regardless, the 9.3 percent vacancy
rate is still one of the tightest in the market. The activity among these large
tenants to Sawgrass Park, such as SR Technologies (77,200 square feet), E-
Builders (28,100 square feet), and Landau & Associates (22,000 square feet) –
all three of which are improving their space and/or increasing their footprint –
landlords have pushed rate to end the year. Half of the tracked Class A set
pushed base asking rents up by $1.00 per square foot, for a submarket wide
average of $21.50 per-square-foot (Class A).
There is now only one Class A block of space on the market above 20,000
square feet (31,818 square feet at Sunrise Corporate Plaza I), but we are
currently tracking nearly 800,000 square feet of active requirements in the
Western Suburbs, in addition to multiple tenants in Sawgrass above 30,000
square feet with expirations in the next three years. This level of demand,
together with the lack of space, may be the fuel needed for large scale
projects like Metropica and Westerra to gain momentum.
-50,000
0
50,000
100,000
2015 2016 2017 2018
Deliveries
Limited availability not a problem, as the submarket
captures several large deals in 2018
11.9%
9.6%
8.6% 9.3%
2015 2016 2017 Q4 2018
Total vacancy
29.39 31.14 33.48 34.01
24.59 27.10 25.95 24.49
$0.00
$10.00
$20.00
$30.00
$40.00
2015 2016 2017 Q4 2018
Class B
• Sawgrass Park saw several large deals signed in 2018, which should
bring vacancy down further in the months to come.
• The tight market has fueled landlord confidence, with several buildings
in the Park increasing base asking rents.
• No new product is underway in the submarket, but developers are in
position to act as large blocks dwindle.

Q4 2018
Southwest Broward
Office Insight
For three years, Class A occupancy in Southwest Broward has hovered at
roughly 90.0 percent, with short-term swings from time to time. But in 2018,
tenants was relatively quiet, with only 29,100 square feet of occupancy gains.
For perspective, tenants absorbed over 271,000 square feet of Class A space
between 2016 and 2017 – 11.1 percent of the submarket’s total inventory. One
reason for this capture has been the market’s appetite for new, quality space.
Coming out of the recession, virtually no new supply was added to the
market, but in 2015, construction picked up in Southwest Broward – 304,700
square feet has been completed since 2015, and over 73.0 percent of all Class
A occupancy gains since then have occurred in new construction.
And these projects still have room to run with 106,600 square feet of available
space. That availability, along with market wide confidence, has helped push
rents to record highs. Currently, average Class A rents are $33.96 per-square-
foot (full service). Properties built since 2015 are asking $35.44 per-square-
foot on average, compared with $33.49 per-square-foot for properties
constructed before 2015; further, average rents in the pre-2015 set have
increased nearly $1.00 per-square-foot since year-end 2017.
This kind of strong rent performance, the high levels of demand seen prior to
2017, and anticipated occupancy gains from notable lease transactions this
year, should give developers confidence when looking for prelease tenants.
The submarket is well positioned to draw tenants from both Miami-Dade and
Broward County, and the fact that the proposed buildings in the pipeline are
offering 5.5/1,000 parking, new product along the I-75 corridor should be
attractive to tenants looking to densify. With over 800,000 square feet of active
requirements in Western Broward, its only a matter of time before dirt starts
moving at one of these proposed sites.
-100,000
0
100,000
200,000
2015 2016 2017 2018
Deliveries
After two years of robust activity, Southwest Broward
has a quiet 2018, but that’s not a bad thing
15.8%
11.2%
7.8%
9.5%
2015 2016 2017 Q4 2018
Total vacancy
33.01 33.15 33.65 33.96
23.23 24.23 24.25
29.54
$0.00
$10.00
$20.00
$30.00
$40.00
2015 2016 2017 Q4 2018
Class B
• The submarket remains one of the tightest in Broward, especially for
Class A space, which is a contributing factor to lower absorption gains.
• The scarcity of quality space, along with new development, has helped
push asking rates to record high levels.
• Newer product proves to be in demand, which may lead to more
groundbreakings.

About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and in-
vestment management. Our vision is to reimagine the world of real estate, creating rewarding
opportunities and amazing spaces where people can achieve their ambitions. In doing so, we
will build a better tomorrow for our clients, our people and our communities. JLL is a For-
tune 500 company with operations in over 80 countries and a global workforce of 88,000 as of
September 30, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle
Incorporated. For further information, visit jll.com

Broward County Office Outlook - Q4 2018

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