Blanca Commercial Real Estate recently released a report on Miami’s office market, indicating that the region outperforms the nation, with consistent leasing activity expected to increase in the next quarter. An anticipated influx of company relocations and expansions could continue furthering the area’s reputation as Wall Street South. The report from Blanca hints at the new activity in Miami Beach and other upcoming world-class projects set for construction later this year that could signal a new tier of ultra-premium office space emerging in the region—upwards of $200 per square foot. Other key findings include:
- Miami’s commercial real estate market is stable, with 744,000 square feet of leasing activity in Q1, aligning with historical averages. Although this figure is down 11% YoY due to deal timing, the market is expected to rebound with significant lease transactions in Q2, indicating a reliable and resilient market.
- Rental rates are rising; Brickell has high rates, but new projects in Miami Beach are asking even more. While Brickell averages the highest asking rates ($86 per square foot, driven by Class A asking rates increasing to an average of $98 per square foot), new projects in Miami Beach have the highest asking rates, with rates in the most exclusive premier assets approaching $200 per square foot.
- Overall, Miami-Dade’s asking rates in the mid-50s are comparable to gateway markets like downtown D.C., Boston, LA, and Chicago. When they begin construction this year, world-class projects could redefine Miami’s top pricing brackets from $120 to $200 per square foot (triple net).
- There is strong demand from existing tenants, with key lease and expansion wins, including Quirch Foods’ 29,000 square-foot renewal in Coral Gables and Point72’s 6,900 SF Brickell expansion.
- The countywide vacancy rate for Class A and B office space decreased from 17% to 16.7%, likely due to the lack of new deliveries this quarter and strong leasing activity from existing tenants. The most significant drops in vacancy rates were in submarkets where new projects were delivered in the past two years, such as Coral Gables (The Plaza North Tower) and Wynwood (545 Wyn – main photo), which are 95% and 83% leased, respectively, indicative of the continued flight to quality trend across the region.
- The future looks bright with new construction, as more than half (51%) of the 1.8 million square feet under construction is expected to be delivered this year, including 830 Brickell and 601 Miami in the Central Business District. Only 25% of this year’s new office space remains available, making it an active year for project delivery, barring any setbacks.
