Continued improvement in Miami
Service job growth in Miami slowed significantly from 7.8% in 2021 to just 1.1% by 2024, falling below the pre-2020 average of 2.3%. However, despite this deceleration, Miami’s unemployment rate remains notably lower than the national average. On a positive note, the office market has continued to outperform nationally, with a total of 2.4 MSF of net absorption since early 2021, including 915,000 SF in 2024 alone. As a result, the direct vacancy rate has dropped to 12.9%, marking a 120 basis-point decline from its peak in 2021.
Record High Rents Continue To Rise in Miami
Over the past three years, asking rental rates in Miami have reached unprecedented levels. By the end of 2024, the average rate across the market has risen to $59.16 PSF, reflecting a remarkable 39% increase—an additional $16.50—over just five years. This growth has been particularly notable in key urban submarkets such as Brickell, Downtown, and the Wynwood-Design District. While the pace of office rent growth has slowed slightly in 2024, it remains significant at 5.0%. Despite this moderation, rates continue to surge, setting new records throughout the year.
Investment Sales Slowing
Office investment in Miami rebounded in 2024 after a softened 2023. With $1.8 billion in sales volume recorded in 2024, it markets the second-highest year of sales in seven years.
In 2024, one of the highlight sales in the Miami office market was the sale of 400 Biscayne Blvd, a prime office tower in downtown Miami. The property sold for approximately $312 million. The seller was Hines, a global real estate investment, development, and management firm. The buyer was Brookfield Properties, a major global real estate investor and operator. This deal is particularly notable because it reflects the continued interest in Miami's commercial real estate market, especially in the downtown area, which has seen significant demand for office space in recent years.
