Activity is off to a hot start in Miami's office sector this year as tenants look for smaller spaces in the post-pandemic world. A first-quarter report from Avison Young shows that one million square feet of leases were signed, up 26.5 percent from the same three-month period a year ago.
Leasing activity rebounded in the first quarter of 2025 "after a sluggish 2024," Avison Young noted.
"While overall activity is higher, smaller deals are still leading the way with 85% of all leasing activity occurring in spaces below 5,000 sf. Though smaller spaces are more desired, larger spaces are making a comeback as the average size lease went from 2,641 sf in the first quarter of 2024 to 4,351 sf this quarter."
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The largest recent lease was secured by City National Bank thanks to its 145,000 square feet at 2701 S Le Jeune Rd. The financial institution was followed by TracFone Wireless and Amazon, which leased 51,484 square feet and 50,333 square feet, respectively. On the buying front, Morning Calm Management made the largest acquisition with its $443 million deal for 701 Brickell Ave.
Also, rents continued to grow "steadily" by 3.5 percent in the first quarter to reach an average of $62.96 per square foot in Miami. Net absorption was positive at 116,407 square feet.
Overall, office buildings in the Magic City are 71.9 percent as busy as they were in February 2019. That's above the national average of 61.5 percent.
The strong fundamentals come as construction fell to 734,000 square feet, representing the first time during a quarter that the category has been under a million square feet since 2014.
The only negative was vacancy ticked up by 160 basis points to 15 percent. Trophy's left the most space on the market, with its 24.2 percent rate. Vacancy was the lowest among Class B assets, at 9.6 percent.
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