Miami-Dade County’s office market remains strong, with vacancy rates dropping and rents rising, benefiting both the high and low segments, according to a new report from Savills.
Office availability dropped to 14.6 percent, down 1.2 percentage points over the past year, all while asking rents rose to an average of $68.50 per square foot per year, up 8.4 percent during the same period. The bulk of the activity was split between the affordable Airport West submarket and Brickell, Miami’s pricey financial district, with the former accounting for 28 percent of the activity and the latter 25.2 percent.
The split reflects the bifurcation of the market since the pandemic, as Miami vies to become a global business hub, and companies either flocked to the area or expanded their operations.
Their arrival or expansion pushed rents higher, particularly in coveted markets such as Coconut Grove and Brickell, where asking rents average more than $90 per square foot. The pressures often forced longtime office tenants to relocate to the suburban market, where rents are cheaper.
Some of the biggest expansions included that of Google, which added 10,000 square feet at its office at 1450 Brickell Avenue, bringing the tech behemoth’s total footprint to 45,000 square feet. Spain’s Banco Sabadell renewed its nearly 50,000-square-foot office at the nearby 1111 Brickell tower.
Despite the gains, the report identified several warning signs. Overall, leasing activity in Miami-Dade County slowed to 1.1 million square feet, down from about 1.3 million square feet during the previous quarter.
The Miami-Dade area lacks large offices, with only a dozen options on the market that are larger than 50,000 square feet. The scarcity could hamper the county’s economic growth and discourage companies from setting up a large presence.
Two more office skyscrapers are going up in Brickell — those of Santander Bank and billionaire financier Ken Griffin — but they likely won’t be completed before 2029.
Julia Echikson can be reached at jechikson@commercialobserver.com.
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