Rising Office Rents Amid High Vacancy Rates
Overall Market Trends:
- The median rent for office space in South Florida increased in the second quarter, despite vacancies remaining above 10%, according to JLL’s latest report.
- Miami’s Brickell neighborhood and downtown West Palm Beach are driving the market, attracting out-of-state corporate tenants to new trophy buildings.
Key Players and Developments
Stephen Ross and One Flagler:
- Billionaire Steve Ross, owner of the Miami Dolphins, launched Related Ross, now managing his South Florida commercial real estate holdings.
- One Flagler, a 25-story office tower in downtown West Palm Beach, is set to complete this year. With rents between $120 to $140 per square foot, it is already 75% leased.
- Ross is the largest office property owner in downtown West Palm Beach.
Ken Griffin and 830 Brickell:
- Citadel’s Ken Griffin pre-leased 35,000 square feet on the 14th and 15th floors of 830 Brickell, a 55-story office skyscraper by Oko Group and Cain International.
- Citadel previously leased 95,000 square feet at the same location.
Market Breakdown by County
Miami-Dade County:
- Median asking rent: $63.49 per square foot, up 12.7% from last year.
- Vacancy rate: Dropped to 15.8% from 16.7%.
- New office space: 2.1 million square feet under construction, including 830 Brickell.
Broward County:
- Median asking rent: $44.07 per square foot, up 4.6%.
- Vacancy rate: Slightly dipped to 16.1% from 16.9%.
- New office space: 354,000 square feet under construction.
- Notable lease: Jazwares leased 132,638 square feet at South Pointe I in Plantation.
Palm Beach County:
- Median asking rent: $55.18 per square foot, up 4.1%.
- Vacancy rate: Rose to 12.8% from 11.2%.
- Strong performance in downtown West Palm Beach and Palm Beach, with One Flagler’s vacancy rate at 6.5%.
- Stephen Ross’ 360 Rosemary: Attracted six new tenants, including JPMorgan Chase, in May.
The South Florida office market is experiencing rising rents, particularly in Miami-Dade and Palm Beach counties, driven by high-demand areas like Brickell and downtown West Palm Beach. Despite overall vacancy rates remaining high, notable developments and strategic leasing by major players like Stephen Ross and Ken Griffin are keeping the market dynamic and attractive to new tenants.
