Miami office market reports
Miami’s office market remains hot as absorption continues to trend positive and rents are at record highs for the county. Several developers and tenants made large announcements in the second quarter of 2022 that they would be entering the Miami market, including the Related Companies and Citadel.
Developers remain bullish on Miami’s office market following a wave of company relocations to the area. Over 1.5 million square feet (msf) is currently underway, with large concentrations in Brickell, Wynwood, and Coral Gables. Citadel made an announcement in the second quarter that it would be relocating its headquarters to Miami and developing an office tower along Brickell Bay.
Significant gains in net absorption are beginning to materialize in Miami as tenants start taking occupancy of their spaces following a year of robust leasing activity from new-to-market tenants. The largest move-in of the second quarter was Lennar Homes, which finally took occupancy of 156,000 square feet (sf) at 5505 Waterford after signing a lease back in 2019.
Direct asking rent
Asking rents in Miami have been growing at a breakneck pace amid a wave of new-to-market relocations; however, the rate of growth is beginning to decelerate. Miami’s overall average asking rate reached $47.38 per square foot (psf) at the end of the second quarter of 2022, which is a substantial 9.1% increase from a year ago, but only a 1% uptick from last quarter.
Leasing activity remains robust in Miami, and total availability has declined by 13.8% from year-end 2021. There is currently 10.7 msf of available space on the market in Miami.
Miami’s overall vacancy continued its decline to 16.1% at the end of the second quarter of 2022—the lowest point since pre-pandemic. Vacancies will likely see a temporary uptick near the end of the year when 830 Brickell is expected to deliver to the market.
Investment sales volume gained some steam during the second quarter, largely due to the $286.5-million massive sale of 1221 Brickell Avenue, which Citadel is rumored to have purchased under a mysterious LLC. However, investment activity as a whole has slowed down amid rapidly rising interest rates. At the mid-year point, Miami’s total office investment volume is only 39% of 2021’s total volume.
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Get in-depth office market reports from commercial real estate experts in the Greater Miami area. Avison Young advisors look at Miami commercial real estate activities and the latest Miami statistics to provide you expert market research on Miami's office properties.
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