Decelerating leasing activity and rent growth are indicating a slowdown in South Florida’s commercial real estate market, according to experts at the CCIM Institute Florida Chapter’s annual outlook conference. Despite this, analysts expect commercial real estate activity in the region to remain healthy through 2026.
Retail properties, particularly grocery-anchored shopping centers, are outperforming other U.S. markets. Carrie Smith of Franklin Street said, “If you are a well-positioned asset, you’re probably feeling pretty good.” She noted that grocery-anchored centers maintain occupancy rates between 95 and 96 percent, higher than unanchored properties.
Analysis by The Real Deal found that seven of last year’s largest retail transactions involved outdoor shopping centers, with half anchored by grocery stores. These deals accounted for more than $636 million—over half of the top 11 retail sales totaling $1.2 billion.
Smith attributed much of retail’s momentum to population growth and business expansion in Florida. The elimination of sales tax on commercial leases in 2024 was described as a “huge win” for retailers and restaurateurs. Smith added, “Miami market rents compared to the country are almost double. You’re seeing rents in the mid-to-high $40s per square foot triple-net, and some topping triple digits. Supply is low for the demand we’re seeing — not only in this market, but throughout the Southeast.”
The office sector has faced challenges since 2024 following earlier surges in tenant demand and rents. Grant Killingsworth from CBRE explained, “The spigot of new tenants from the Northeast quickly dried out. We had landlords with debt coming due turning the keys back to the bank.” Notable transactions included Rockpoint’s sale of One Clearlake at a loss and R&B Realty losing Gateway at Wynwood in bankruptcy proceedings.
However, high-end submarkets like Brickell experienced significant rent increases. Killingsworth stated, “Brickell went from $65 a foot to $150 a foot. That’s trophy pricing, the same as Midtown Manhattan.” He also pointed out that areas such as Coral Gables have become attractive alternatives due to lower costs and shorter commutes.
Looking ahead, Killingsworth expects stability: “We’re out of the challenging debt cycle… There’s not a lot of new construction planned in the next three years. I don’t foresee any major disruption in rents.”
South Florida’s industrial sector has also slowed after rapid recent growth. Edison Vasquez from CommReal observed vacancy rates rising slightly but called it a balanced market favoring tenants: “We saw incentives from anywhere between six to twelve months of improvement allowances and moving expenses… They’re doing what they can to avoid empty spaces.” Sales activity remains strong with end users paying premiums over investors.
Land pricing remains an issue; sellers’ expectations exceed what developers can pay: “This year will be key to resolving that,” Vasquez said. He does not anticipate price drops due to limited availability and lower interest rates: “People are waiting for prices to collapse… We don’t see that happening.”
In multifamily housing, Mitash Kripalani from Cushman & Wakefield described stabilization after years of sharp rent growth driven by pandemic migration: “Rising interest rates slowed down transaction activity, but pricing per unit has remained stable because of strong demand and disciplined investors.” About 50,000 units are under construction across South Florida—over 30,000 in Miami-Dade County alone—with most development focused on dense urban locations.
Kripalani concluded that easing borrowing costs could boost investment: “Stable occupancy, stable rents, and improving liquidity is setting the stage for a gradual recovery.”
