South Florida’s Office Market Stands Apart for All the Right Reasons
Miami-Dade office rents are up 15% from last year, Palm Beach County up 31%
By Jeff Ostrowski October 21, 2024 2:20 pm
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As more workers return to offices, South Florida continues to achieve new records and stand apart from the rest of the nation’s slumping and distressed office market.
Overall asking office rental rates in Miami-Dade County rose to an average of $66.33 per square foot per year in the third quarter, up 15 percent from a year earlier, commercial real estate firm JLL (JLL) reported In a separate study, Cushman & Wakefield (CWK) reported that office rents in Miami-Dade’s central business district rose to $79.54 per square foot during the third quarter.
The eye-popping rents in Miami’s Brickell submarket have been pushing up the numbers. Space at 830 Brickell has been renting for well above $100 per square foot.
In a sign that South Florida continues to attract out-of-state employers, 450,000 square feet of office space at the 638,000-square-foot 830 Brickell will be filled by new-to-market tenants. That roster includes Citadel, Microsoft (MSFT), private equity firm Thoma Bravo and law firms Kirkland & Ellis and Sidley Austin.
Overall leasing volume in Miami-Dade County in the third quarter was 443,000 square feet, Cushman & Wakefield reported. The office vacancy rate was 16.2 percent.
“Miami continues to settle into its vibrant post-pandemic normal, still attracting new-to-market tenants, and maintaining its position as a prime business hub,” JLL said in its market report. “Major companies’ 2025 return-to-office protocols are bolstering the office sector outlook, both locally and nationwide.”
North of Miami in Palm Beach County, the average rental rate for office space soared to $71.69 per square foot, up 31 percent from the third quarter of 2023, according to JLL. In one notable deal, energy drink maker Celsius leased 50,000 square feet in Boca Raton during the quarter, though vacancy rose to 12.5 percent
In Broward County, rents rose to $41.23 a square foot. Vacancy was at 15.4 percent, Cushman & Wakefield reported.
The sunny outlook for South Florida rental rates has been in marked contrast to the picture elsewhere, as many office properties fell into distress territory.
As Class A rents soar in South Florida’s downtown markets, some price-sensitive tenants are opting for suburban space outside central business districts, said Eric Messer, senior research manager at Cushman & Wakefield.
“We have seen a shift where non-CBD markets are performing a little better than CBD markets,” Messer told Commercial Observer.
Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.
