Miami’s office leasing market has experienced a noticeable slowdown in the second quarter of 2025, following a promising start to the year.
New leasing activity fell to 454,000 square feet, down more than 100,000 square feet from the 580,000 square feet signed in the first quarter, according to Cushman & Wakefield.
This downturn signals a return to the sluggish demand that characterized 2024, as the wave of corporate migration triggered during the pandemic continues to wane.
Savills Market Research Lead Andrea Duque noted that national relocations to South Florida have also slowed, contributing to the dip in demand.
“We still have demand, but because we don’t have that many relocations, developers have also realized that demand is not as strong,” Duque explained.
A quarterly report by Blanca Commercial Real Estate highlighted a broader decline in total leasing activity, including renewals, which fell to 514,000 square feet from 929,000 square feet at the beginning of the year.
This figure is also below the five-year average of 770,000 square feet, a number that had been somewhat inflated by a 2022 post-pandemic surge.
With demand decreasing, landlords are finding it more challenging to increase rental rates.
Class-A asking rents saw a slight decline of 0.3% from the previous quarter, marking the first decrease since Q1 2020, according to Colliers.
This decrease was attributed in part to Brazilian investment bank Banco Master leasing the remaining 27,000 square feet in 830 Brickell, which took a $180 per square foot listing off the market.
Despite this drop, Cushman & Wakefield’s findings indicated a small rise in average asking rents, moving from $63 per square foot to $63.39 per square foot.
These rents are expected to continue rising, albeit at a slower pace, according to Senior Research Manager Eric Messer.
“Landlords have the continued momentum with that around a 15% vacancy rate,” Messer stated. “I don’t see vacancy increasing to a level where landlords lose their negotiating power.”
However, with only 500,000 square feet currently under construction and little prospect for new groundbreakings, the market may become less appealing to companies from cities like New York or Chicago looking to open satellite offices.
Colliers’ South Florida Senior Vice President Kevin Gonzalez emphasized that it takes four to five years to deliver a new building, which could lead to diminishing demand if new-to-market companies don’t have suitable options.
“If you’ve got new-to-market companies who are looking down here and they don’t have anywhere to go, then it’s not like they can force new inventory on us,” Gonzalez noted.
In the second quarter, several existing companies expanded their presence in the Miami area.
Amazon increased its lease at Wynwood Plaza to 76,000 square feet, while Uber doubled its leased space at 3 MiamiCentral.
Financial services firms such as J.P. Morgan, Apple, Blackstone, and Goldman Sachs have also increased their footprints in various Miami submarkets.
Gonzalez remarked, “We’re seeing a lot of financial service firms here grow exponentially. This is the stuff that happens when you become a mature market, when you evolve from a secondary to a primary market.”
Despite this growth, there remains an undercurrent of uncertainty affecting the market.
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