Decelerating leasing activity and slower rent growth are signaling a shift in South Florida’s commercial real estate market, according to experts at the CCIM Institute Florida Chapter’s annual outlook conference. Despite this slowdown, panelists said the region is expected to maintain healthy levels of commercial real estate activity through 2026.
Retail properties, particularly grocery-anchored shopping centers, continue to outperform other sectors nationwide. Carrie Smith of Franklin Street noted that retail fundamentals remain strong and landlords have experienced rent growth since the pandemic. “If you are a well-positioned asset, you’re probably feeling pretty good,” she said.
Smith added that grocery-anchored centers are highly sought after, with occupancy rates averaging between 95 and 96 percent—higher than those for unanchored properties. Seven of last year’s largest retail transactions involved outdoor shopping centers, which sold for a combined $636 million and accounted for more than half of the $1.2 billion in total sales among the top 11 deals, based on an analysis by The Real Deal. Half of these major transactions were anchored by grocery stores.
Population growth and business expansion in Florida have contributed to retail’s momentum. The state’s decision to eliminate sales tax on commercial leases in 2024 was described as a significant benefit for retailers and restaurateurs. Miami continues to see some of the highest retail rents in the country. “Miami market rents compared to the country are almost double,” Smith said. “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 two years of increased tenant demand and rising rents in downtown submarkets, according to Grant Killingsworth from CBRE. “The spigot of new tenants from the Northeast quickly dried out,” Killingsworth said. “We had landlords with debt coming due turning the keys back to the bank.” Some property owners experienced losses; Rockpoint sold One Clearlake office tower at a discount compared to its previous sale price, while R&B Realty lost Gateway at Wynwood through bankruptcy auction.
However, high-end submarkets like Brickell saw substantial rent increases over recent years. “Brickell went from $65 a foot to $150 a foot,” Killingsworth said. He cited Amancio Ortega’s acquisition of Sabadell Financial Center for $275 million and a major refinancing deal for 830 Brickell as signs that certain areas remain active.
Other neighborhoods such as Coral Gables have also attracted financial companies seeking lower costs and shorter commutes compared to Brickell.
Looking forward, Killingsworth expects stability: “We’re out of the challenging debt cycle,” he said. “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 slowed after several years of rapid growth but remains active overall, CommReal’s Edison Vasquez reported. Vacancy rates rose slightly from five percent to six percent as landlords began offering incentives like improvement allowances or moving expenses: “They’re doing what they can to avoid empty spaces.” Still, end users paid higher prices than investors last year—averaging about $275 per square foot—with some deals reaching $300 per square foot.
Vasquez pointed out that Blackstone sold nearly $1.9 billion worth of warehouse portfolios last year and predicted further stabilization ahead despite ongoing challenges with land pricing expectations between sellers and developers.
Operators face pressures from property taxes and insurance costs but limited inventory should help keep values elevated: “People are waiting for prices to collapse,” Vasquez said.“We don’t see that happening.”
In multifamily housing across Miami-Dade County, Cushman & Wakefield’s Mitash Kripalani described an era of stabilization following extreme rent growth during pandemic migrations into South Florida.“Rising interest rates slowed down transaction activity,but pricing per unit has remained stable because of strong demand and disciplined investors,” he explained.
Development remains robust with approximately 50,000 units under construction across South Florida—over 30,000 located within Miami-Dade itself.Most projects target dense urban cores with access to transit options.Developers have paused or sold off some planned projects,but easing borrowing costs could renew investment momentum this year.“Stable occupancy,s table rents,and improving liquidity is setting the stage for a gradual recovery,” Kripalani concluded.
