After Slowdown, Office Pace Picks Up
Florida, especially South Florida, shows strong office space demand despite national vacancy highs, mostly due to the state’s pro-business atmosphere.
NEW YORK — Office vacancy rates are at their highest point in 45 years, according to business insight firm Switch on Business. One-quarter of existing office space in the U.S. could be vacant by early 2026, and 10 of the nation's largest office markets each have at least $1 billion worth of empty space, the firm’s new report found.
Some of this is due to millions of office employees across the nation who are working remotely or on a hybrid schedules, which reduces the need for office space.
Florida, however, remains an outlier. In much of the state, including South Florida demand for office space is strong due to the business-friendly atmosphere that’s attracted companies since the onset of the COVID-19 pandemic. The Miami area has less available inventory space than other metro areas, such as New York or Chicago.
Kevin Gonzalez, senior vice president with Colliers in Miami, said, "The Miami metro market … is behaving very differently from the rest of the nation."
In the first quarter, 13.19 million square feet of office space remained vacant in South Florida, equating to rent losses of about $626.33 million, according to the Switch on Business report.
About 6.09 million square feet of office space in Miami-Dade County is still vacant. Broward County recorded about 4.41 million square feet of office vacancies and Palm Beach County had about 2.69 million square feet of empty office space.
South Florida's peak high for vacancies was 18 million square feet in 2010, and in Miami at that time, 21.6% of office space was vacant.
The Great Recession brought on office vacancies in the area but by 2013, South Florida's office market had recovered.
Eric Messer, Cushman & Wakefield's senior research manager for Florida, said, "South Florida, particularly Miami and Palm Beach, experienced strong growth from 2021 through 2023, as Florida's business-friendly tax structure, along with robust net migration, created the recipe and demand from companies looking to relocate or open up operations in the state." He added that newly proposed office spaces will be mixed-use with residential and retail spaces, known as live-work-play developments.
Source: South Florida Business Journal (01/02/25) Bojnansky, Erik; Drilling, Joanne
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