There was no time for brokers to take a dip in the pool or a trip to the spa this summer as office leasing jumped going into the second half of the year.
Bisnow/Chloe Gallivan
Miami’s office scene is on track to surpass 2024 leasing activity.
There were 502K SF of office leases signed in Miami during July, August and September, up more than 200K SF from the second quarter, according to a CBRE report. On the year, office leasing activity has already met 99% of 2024’s total.
“This summer wasn’t the time to take a vacation,” CBRE Senior Vice President Randy Carballo said.
Miami’s office market had a busy start to the year after a slow 2024. But the momentum didn’t last long when activity dipped to about 280K SF of new leases signed during the second quarter, which started as President Donald Trump announced his new global tariff rates — sparking macroeconomic uncertainty as policies teetered back and forth.
Carballo said some lease negotiations that started in the first and second quarters may have closed sooner if not for the turbulence. But while some fronts of the trade war have stayed active, companies started to move with more certainty, and many deals ended up closing in the third quarter.
“The world felt more turbulent in the first half of this year than it has in the second half — maybe not much less turbulent, but it certainly felt more turbulent,” he said. “Now I think that has softened up and folks are just able to take a deep breath and have a better picture of what they believe the world will look like.”
In Blanca Commercial Real Estate’s preliminary data, leasing activity — which includes total new leasing and renewals — totaled 951K SF, 23% above the five-year average.
“The volume of deals that were closed surprised me,” Blanca Commercial Real Estate Vice Chairman Danet Linares said.
Second-quarter absorption dipped to 11K SF, down from 22K SF the previous quarter, which CBRE attributed to elevated rents in markets like Brickell, where asking rents are up to nearly $93 per SF, influencing relocations to submarkets like Coral Gables.
While overall asking rents only ticked up 0.1% to $63.73 per SF from the second quarter, they are up nearly 7% year-over-year.
As the amount of premier space on the market has dried up and with no large buildings going up, rent growth has slowed, CBRE research analyst Francisco Martinez said. But after growing 66% over the last five years, Miami is still one of the most expensive markets in the nation.
Miami’s direct vacancy sits at 14.9%, and space is even more limited in submarkets like Brickell, which is at 13.4%; Aventura, which is at 7.9%; and Coconut Grove, where just 3.1% of the submarket’s 1.2M SF inventory is vacant, according to CBRE.
With no substantial supply coming online until 2030 and about 772K SF under construction, rents are likely to stay elevated, Carballo said.
“I don’t think we’re going to be at a stagnant level,” he said. “I don’t think we’re seeing [66%] over the next five years, but I do think there’s more to grow.”
The quarter’s largest lease was signed by Stearns Weaver Miller, which took 97K SF at the Museum Tower in Downtown Miami in August, according to CBRE. ADP‘s 78K SF lease for its new Miami office at the Miami Waterford Business District was the second-largest.
There also continues to be corporate migration into the area. Playboy signed a 26K SF lease last quarter to move its headquarters to Rivani Miami Beach.
But much of the activity was driven by local businesses moving to a more affordable neighborhood. The airport and Doral submarket led with 28% of new leases, while Downtown Miami grabbed 27% of leased square footage and Brickell took in 13%, according to CBRE.
Even amid the backdrop of a government shutdown entering its third week, bringing economic risks to commercial real estate with each passing day, brokers expect Q4 to have similar momentum.
“A very odd time,” Linares said. “I think the fundamentals are shot. I don’t know what’s happening, but people just seem to be playing along and continuing.”