The office market in Miami-Dade County remains robust, characterised by falling vacancy rates and rising rental prices. This development favours both the prime and the more affordable segments, according to a recent Savills Q3 report.
Space availability decreased to 14.6 per cent, a year-on-year drop of 1.2 percentage points. At the same time, average asking rents increased by 8.4 per cent to $68.50 per square foot per annum over the same period.
Activity was primarily concentrated in two submarkets: the more affordable Airport West and Brickell, Miami's exclusive financial district. Airport West accounted for 28 per cent of market activity, Brickell for 25.2 per cent.
Market changes and expansions
This split reflects market segmentation since the pandemic, as Miami strives to become a global business hub. Companies have either established themselves in the region or expanded their presence. This arrival or expansion led to higher rents, particularly in desirable locations such as Coconut Grove and Brickell, where average asking rents exceed $90 per square foot. The increasing pressure forced many long-standing office tenants to relocate to more suburban markets with more favourable rental prices.
Among the most significant expansions was that of Google, which expanded its space at 1450 Brickell Avenue by 10,000 square feet, reaching a total area of 45,000 square feet. The Spanish Banco Sabadell extended its lease for the nearly 50,000 square feet of office space in the nearby 1111 Brickell Tower.
Challenges and future developments
Despite these positive developments, the report points to several warning signs. Leasing volume in Miami-Dade County slowed to 1.1 million square feet, down from approximately 1.3 million square feet in the previous quarter. The area also lacks larger office spaces; there are only a dozen options greater than 50,000 square feet. This scarcity could hinder the county's economic growth and deter companies from establishing a larger presence.
Two additional office skyscrapers are under construction in Brickell – projects by Santander Bank and billionaire Ken Griffin. However, their completion is not expected until 2029 at the earliest.
