Miami Office Deal Volume Increases, Prices Surge

Miami’s office market continued its good performance recorded at the beginning of the year, CommercialEdge data shows. The metro’s significant development pipeline was coupled with heightened investment activity, as assets changed hands at high prices.

As of August, Miami’s office market had 2.8 million square feet of space under construction, representing 3.9 percent of existing stock—well above the national figure of 1.0 percent. Miami ranked third on a national level, behind Austin that led with 4.6 percent of total stock and Boston with 4.4 percent. Other peer markets trailed the national figure, including Los Angeles (0.9 percent), Washington, D.C. and Manhattan, both with 0.6 percent.

The metro is among the top markets for potential office-to-residential conversion. CommercialEdge’s Conversion Feasibility Index is a new tool that helps identify the amount of office space in the top U.S. markets that could be redeveloped into residential use, based on a comprehensive list of building features. The index showed that in July, Miami’s office stock had 16.1 percent conversion potential, higher than the national average of 14.8 percent of total stock.

Large office projects boosting Miami’s pipeline

In terms of under-construction office space, the Magic City’s pipeline outperformed that of Manhattan (2.7 million square feet), Los Angeles (2.6 million square feet), Washington, D.C. (2.2 million) and Seattle (2.1 million). Across peer markets, Chicago had the smallest pipeline, with 811,394 square feet underway, while Boston led the rankings with 11.2 million square feet.

Year-to-date through August, developers broke ground on 538,842 square feet of space across six properties, while only four projects came online, totaling 249,138 square feet.

The Offices at 601, a 155,100-square-foot high-rise, was the largest development to come online in the first eight months of 2024. Rising 51 stories at 601 Northeast 1st Ave., the tower was developed by an entity linked to Galmut Family and designed by prestigious architecture studio Arquitectonica.

The list of significant office projects underway remained unchanged since out last update. 830 Brickell Plaza remains the largest development in the metro, with completion planned for the end of September 2024. The high-rise will add 640,00 square feet of space to the city’s inventory. The Class A+ office tower is developed by OKO Group and Cain International.

Royal Caribbean’s new headquarters, a 10-story property of 380,000 square feet, is expected to come online in January 2026. Rising at 1050 Caribbean Way in Miami’s central business district, the development is the second-largest project being constructed in the metro.

Miami office deal volume increases

Year-to-date through August, 29 properties totaling 1.7 million square feet traded in Miami for a total of $588 million, marking a 93.8 percent growth year-over-year. The metro’s deal volume has significantly increased since 2024’s first quarter, when it totaled $207 million. This jump in deals put Miami in third place across similar markets, with Seattle (171.7 percent annual growth) and Washington, D.C. (115.0 percent) topping the list.

Notable office deals in the metro included MSC Group’s $67 million acquisition of a 130,000-square-foot office component at the soon-to-be completed Block 55 development. The commercial unit that changed hands was developed as MSC Group’s future headquarters.

Another significant deal was Black Lion Investment Group’s $62.5 million acquisition of The Lincoln, a 161,448-square-foot office building in Miami Beach, Fla. The buyer plans to invest $50 million in redeveloping the asset into a luxury office concept dubbed Class X.

Year-to-date through August, Miami’s average price clocked in at $354 per square foot, significantly above the national average of $168 per square foot. Across gateway markets, Miami emerged as one of the most expensive office metros, outpaced only by Los Angeles ($423 per square foot) and Manhattan ($370 per square foot). Meanwhile, Washington, D.C. ($246 per square foot), Seattle ($187 per square foot) and Boston ($156 per square foot) lagged.

Miami’s office vacancy rate on the rise

Miami’s office vacancy rate fluctuated since the start of the year—from the 12.4 percent recorded in January to 14.1 percent in August, when it was 80-basis-points higher than in August 2023. Even with this slight increase, Miami’s August rate was well below the national figure of 19.4 percent.

One of the most significant leases signed in the metro since the start of the year is Pebb Capital’s 79,141-square-foot deal with DigitalBridge at Sundy Village, a 180,000-square-foot office complex nearing completion in Delray Beach, Fla. The tenant will relocate its headquarters to a four-story building within the campus.

Another recent leasing deal is Adler Real Estate Partner’s 42,563-square-foot renewal with Boston Proper at an office and flex business complex in Boca Raton, Fla. The tenant will maintain its headquarters at 1155 Broken Sound Parkway NW, a 62,729-square-foot office building within The Park at Broken Sound, where the landlord owns three buildings.

The coworking landscape keeps steady

As of August, Miami’s coworking sector comprised 2.9 million square feet of shared space. Across gateway metros, Manhattan boasted the largest flex office stock of 11.3 million square feet, followed by Chicago (6.3 million square feet), Los Angeles (6.3 million square feet) and Washington, D.C. (6.2 million square feet).

The metro’s coworking space as percentage of all leasable office space reached 3.7 percent, outperforming Manhattan (2.3 percent), Los Angeles (2.1 percent), Washington, D.C. (1.6 percent), and Boston, that was on par with the national figure of 1.8 percent.

Year-to-date through August, Regus was the flex office provider with the largest footprint in Miami, followed by WeWork, Spaces, Quest Workspaces and Industrious.

In August, Venture X signed a 28,959-square-foot long-term deal at a two-building office campus in Boca Raton, Fla., currently undergoing an extensive redevelopment program. The company will open a new coworking space at the 147,627-square-foot campus, owned by Grover Corlew.