Office rents in Miami-Dade and Palm Beach counties declined in the third quarter, reflecting a cooling demand for office space, according to a recent report from JLL. The report indicates that average asking rents fell to $65.89 per square foot in Miami-Dade, down from $66.33 during the same period last year. In Palm Beach County, rents decreased to $68.81 per square foot from $70.69 a year earlier.
Vacancy rates remained relatively stable in both markets. Miami-Dade’s vacancy rate was 15.8 percent, only slightly higher than 15.5 percent last year. Palm Beach County saw its vacancy rate rise to 14.4 percent from 13.2 percent over the same period.
Some property owners have responded to these conditions by selling assets or exiting projects. Developer Michael Shvo sold his properties at 1656-1680 Alton Road in Miami Beach for $28.2 million to Infinity Collective after purchasing them for $39.3 million in 2022 with plans for redevelopment into office and residential space. “The office project was ‘no longer the highest and best use for this site,'” Shvo told The Real Deal.
Distressed sales also occurred elsewhere in the region. R&B Realty lost control of Gateway at Wynwood, a 12-story building on North Miami Avenue, after failing to refinance a delinquent mortgage of nearly $113 million. Cire Equity acquired the property following a bankruptcy auction.
Despite these challenges, some notable leases were signed during the quarter. Playboy agreed to lease a 20,000-square-foot penthouse at The Rivani in Miami Beach with plans to move its headquarters there from Beverly Hills next year—though this move is contingent on receiving $800,000 in incentives from the city.
The largest lease transaction in Miami-Dade was Stearns Weaver Miller Weissler Alhadeff & Sitterson renewing its agreement for nearly 97,000 square feet at Museum Tower in downtown Miami. In Wynwood, OKO Group leased more than 25,000 square feet at Wynwood Plaza.
Broward County saw an increase in average asking rent to $48.54 per square foot from $42.93 last year while its vacancy rate remained unchanged at 15.9 percent. New construction activity was largely steady compared to last year’s figures.
In Broward, companies opted to purchase rather than lease office space. Lennox Industries bought a 30,000-square-foot building in Fort Lauderdale for $16 million to serve as its Southeast U.S. headquarters.
Palm Beach County maintained an active development pipeline with about 1.1 million square feet under construction—the same level as last year—but is experiencing slower leasing activity despite recent investments such as Steve Ross’ developments in West Palm Beach. ServiceNow signed a lease for nearly half of the new 10 CityPlace tower developed by Related Ross.
Overall, South Florida’s office market is showing signs of strain amid fluctuating demand and changing tenant preferences.
