Miami’s office market has made a notable recovery, showcasing its strongest quarter for leasing since the end of 2023, alongside a significant increase in asking rents.
In the first three months of the year, new leasing activity in Miami exceeded 580,000 square feet, with the average asking rent climbing to over $63 per square foot.
This represents a remarkable 15.6% increase year-over-year, according to Cushman & Wakefield’s first-quarter office report.
Additionally, vacancy rates, currently at 15.4%, are anticipated to dip to approximately 14% within the next 12 to 18 months as pre-leased tenants begin to occupy newly completed office spaces this year.
Eric Messer, Senior Research Manager at Cushman & Wakefield, provided insights into these trends.
In another report, Blanca Commercial Real Estate estimates that Miami-Dade’s leasing for the first quarter reached 929,000 square feet, marking it as the strongest first quarter since 2022.
Tere Blanca, founder and CEO of Blanca Commercial Real Estate, commented on the situation, stating, “We still finished the year pretty solid, knowing the comparison to other markets around the country.”
She added that 2025 has observed a surge of urgency among companies making decisions regarding their real estate, as many transactions are being finalized from the previous year.
Part of the revitalized activity is attributed to a shift towards full-time office work.
Amazon recently signed Wynwood’s largest lease — 50,000 square feet at Wynwood Plaza — soon after implementing its five-day-a-week work mandate.
However, the 2024 office market in Miami experienced a sluggish year, with only 1.5 million square feet of new deals signed, reflecting a 29% decline from 2023.
According to CBRE, brokers have pointed to political uncertainties during the election year, which caused tenants to delay decisions until significant developments occur.
Larger deals that many expected to conclude last year have now pushed into 2025.
This includes Amazon’s substantial lease and Verizon’s TracFone Wireless subsidiary securing 51,000 square feet at the Waterford Business District.
The surge in Miami’s office rents is primarily driven by the demand for Class-A office spaces in areas such as Miami Beach and Wynwood, where average rents range from $78.95 to $87.19 per square foot.
Additional factors contributing to the rent increase include strong demand in Coral Gables and Brickell and the ongoing removal or renovation of lower-tier Class-B buildings.
Coral Gables has emerged as the top performer in terms of demand growth, with nearly 250,000 square feet of leases signed.
Notable deals include a 145,000 square foot relocation deal from City National Bank of Florida and a 65,000 square foot lease with Nicklaus Children’s Hospital at 1 Alhambra Plaza, as reported by Commercial Observer.
This submarket is becoming increasingly attractive not only for its lower asking rents — averaging about $54.35 per square foot – compared to Brickell’s $107.86 — but also as an appealing option for suburban employees looking to avoid Miami’s notorious traffic.
Messer elaborated that, “If tenants don’t necessarily need a downtown or a central business district presence, they’re opting to look at either the Coral Gables market or the Airport West market.”
Despite the positive trend in leasing and rising rents, the influx of new-to-market tenants appears to be slowing.
According to Blanca CRE, just under 8% of the leasing activity came from new-to-market tenants, whereas they typically account for about 10% to 12% of Miami’s leasing activity by the end of a fiscal year.
Blanca noted that larger employers are still exploring office space, indicating a return to a more normal pace in new-to-market activity.
Blanca also expressed optimism, stating, “But if some of the larger requirements happen, it’ll spike this year.”
However, economic policies from the White House have injected significant uncertainty into business decisions.
While reports of stalled deals have mainly affected the manufacturing and industrial sectors, the office market is not entirely insulated from potential impacts if tariffs lead the U.S. into a recession.
Messer concluded, “Whatever comes up over the next few months as things kind of play out, the market is well positioned to be able to handle that.”
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