Miami Office Market Wakes Up As More Tenants Grab Shrinking Available Supply
Miami's office market shook off a sleepy year, with its strongest quarter for leasing since the end of 2023 and a rapid run-up in asking rents.
New leasing in Miami totaled more than 580K SF in the first three months of the year, and the average asking rate rose above $63 per SF, a 15.6% increase year-over-year, according to Cushman & Wakefield's first-quarter office report.
The figure is expected to keep rising with vacancy, now at 15.4% — well below the national average of 20.8% — expected to fall to about 14% within 12 to 18 months as pre-leased tenants move into completed offices this year, Cushman & Wakefield’s Senior Research Manager Eric Messer said.
Blanca Commercial Real Estate pegged Miami-Dade's first quarter leasing at 929K SF, which would make it the strongest first quarter since 2022, according to its Q1 report.
“We still finished the year pretty solid, knowing the comparison to other markets around the country,” founder and CEO of Blanca Commercial Real Estate Tere Blanca said. “But ‘25 started with a big urgency of companies, No. 1, making decisions on their real estate and finalizing transactions that were underway.”
Blanca said the push for full-time office work helped fuel the renewed activity. Amazon signed Wynwood’s largest lease ever with 50K SF at Wynwood Plaza soon after implementing its five-day-a-week mandate.
It was a sluggish leasing year for Miami’s 2024 office market, with just 1.5M SF of new deals signed — a 29% drop from 2023, according to CBRE. Brokers attributed the decline to political uncertainty during the election year with tenants holding off on decisions until after key developments unfold.
Large deals many expected to close last year spilled over into 2025, Blanca said, such as Amazon's deal and Verizon’s TracFone Wireless subsidiary taking up 51K SF at the Waterford Business District.
Miami's rising office rents are driven by Class-A spaces in submarkets like Miami Beach and Wynwood, which average between $78.95 and $87.19, respectively. Other factors, like strong demand in Coral Gables and Brickell and the removal or renovation of lower-tier Class-B buildings, contribute to the spike, Messer said.
Coral Gables held the top spot for demand growth with nearly 250K SF of deals signed, including City National Bank of Florida signing a 145K SF relocation deal to Coral Gables and Nicklaus Children’s Hospital taking 65K SF at 1 Alhambra Plaza, Commercial Observer reported.
The submarket is becoming increasingly attractive, not just for its lower asking rents — about $54.35 per SF compared to Brickell’s $107.86 — but also for offering an option for suburban employees looking to avoid Miami traffic.
“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,” Messer said.
While Miami rides a wave of leasing and rent growth, the flood of new-to-market tenants is tapering off. Just under 8% of leasing activity were new-to-market tenants, according to Blanca CRE.
By the end of a fiscal year, new-to-market tenants typically take up about 10% to 12% of Miami’s leasing activity, Blanca said. She said some large employers are sniffing around for office space.
“We're kind of back to a normal pace in terms of new-to-market activity,” Blanca said. “But if some of the larger requirements happen, it'll spike this year.”
The White House's economic policies have thrown heavy uncertainty into business decisions, however. While reports of paused deals have largely been confined to manufacturing and industrial spaces, the office market is far from immune if tariffs tip the U.S. into a recession.
“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,” Messer said.
