Miami’s Deal Volume Picked Up in Q3

Highland Park Miami will expand Miami Medical District’s footprint by 10 percent. Image courtesy of Black Salmon and The Allen Morris Co.

Miami performed well through the first nine months of this year, with deal volume increasing in comparison with first-quarter data. As of September, the metro’s office market had some 2.4 million square feet under construction, representing 3.6 percent of total stock.

When compared to the national and peer markets figures in relation to the percentage of stock, the metro exceeded the U.S. figure (1.8 percent) as well as Charlotte’s (3.5 percent), Washington D.C.’s (1.2 percent) and Chicago’s (1.0 percent) but was outpaced by Austin’s and Boston’s; both metros had under-construction pipelines accounting for 5.6 percent of total stock.

Despite the slowdown in construction funding and the current economic climate, Miami’s office pipeline remained robust, while the share of coworking space as percentage of total leasable office space was one of the largest among the gateway cities.

Multiple projects underway

Developers added 180,223 square feet of office space this year, spread across four properties, while another 26 properties were underway. One of the largest office projects under construction in Miami is Highland Park Miami, a $1 billion mixed-use project that will increase Miami Medical District’s footprint by approximately 10 percent. Developed by Black Salmon and The Allen Morris Co., the project will feature 500,000 square feet of medical-related office space, a 150-key hotel, 1,000 residential units and restaurants.

830 Brickell. Image courtesy of OKO Group/Cain International

The Class A+ office high-rise at 830 Brickell will total 638,355 square feet upon its completion. Developers OKO Group and Cain International topped out the 55-story project in June 2022, while delivery is expected by the end of the year.

Another major project is Royal Caribbean‘s new headquarters, a Class A office mid-rise totaling 350,000 square feet in Miami’s Central Business District. The $300 million project was slated to come online by the end of 2020, but the pandemic-induced construction delays pushed the delivery date to early 2024.

Deal volume increased since 2023’s first quarter

In the third quarter of the year, Miami’s office sales volume totaled $309 million and 1.1 million square feet, with office buildings changing hands at an average $360.5 per square foot. Miami seems to reemerge as a corporate hotspot, in comparison with the $100 million sales volume and 762,836 square feet recorded in the first quarter of 2023. On a year-to-date basis, the average sale price per square foot in Miami ticked $349, with a total sales volume set at $928 million. Across other markets, sales prices were highest in Manhattan ($568 per square foot), Austin ($425 per square foot) and Boston ($314 per square foot).

Lincoln Place is Starwood Capital’s former headquarters. Image courtesy of CommercialEdge

In terms of total sales volume on a year-to-date basis, Miami outperformed Charlotte ($172 million) and Austin ($496 million) but was outpaced by Los Angeles ($1.98 billion), Manhattan ($1.65 billion), Boston ($1.35 billion) and Chicago ($830 million).

One of the largest deals in Miami closed in September, when PGIM Real Estate sold 355 Alhambra Circle, a 224,241-square-foot Class A office building in Coral Gables, Fla. Princeton International Properties paid $90 million for the 16-story asset.

Another significant acquisition recorded in September includes Black Lion Investment Group‘s $82 million purchase of Lincoln Place in Miami Beach, Fla. The 139,887-square-foot office building was sold by Nightingale Properties.

Flex office providers expanding in Miami

Compared to other markets, Miami had one of the largest shares of coworking space as a percentage of leasable office inventory, at 3.3 percent in September. That outpaces Boston’s 1.7 percent, Chicago’s 1.9 percent and Manhattan’s 2.6 percent rate.

At the end of the third quarter, flex office provider Regus had the largest footprint in Miami, with operations totaling 280,355 square feet. The company was followed by Industrious, with 215,000 square feet, while WeWork was third, with 195,369 square feet. Miami also had some 1.5 million square feet of shared space as of September, outpaced by Boston (2.6 million square feet) but outperforming Seattle (1.4 million square feet). In August, flex office provider Quest Workspaces added 20,844 square feet of coworking space in Boca Raton, Fla., at 1200 Corporate Place, where the company already operates a 21,120-square-foot space, now under renovation.

Wells Fargo Center. Image courtesy of Cushman & Wakefield

Significant leases in September included Greenberg Traurig‘s 128,450-square-foot renewal at MetLife Real Estate Investment’s Wells Fargo Center in downtown Miami. At the building since 2010, the tenant committed to the same five-floor space for the next five years. Additionally, the renewal represents the city’s largest CBD office deal in recent years.

CBRE has been appointed as exclusive leasing agent in charge of a 400,000-square-foot office development coming in Miami’s submarket of West Palm Beach. The Class A, 26-story office tower is being developed by Cohen Brothers Realty Corp. and the first tenant move-ins are expected to begin in late 2026.