Cost of Miami Office Space Hits Record High

According to the Financial Times, Miami has set a new benchmark for office space costs, with recent deals showing rents hitting $200 per square foot. This surge underscores Miami’s growing prominence in the U.S. commercial real estate market.

The prestigious 830 Brickell building has recently secured a deal where Banco Master acquired the final 26,000 square feet for nearly $200 per square foot. This rate is nearly double the previous high set just two years ago. The influx of high-profile companies from major cities like New York, Chicago, and Los Angeles seeking premium office spaces in Miami has driven this dramatic increase.

The rise in office rental prices is largely attributed to the migration of leading financial, legal, and tech firms to Florida, attracted by its favorable tax environment.

The 830 Brickell building, completed in 2023, stands as Miami’s only new luxury office tower in its central business district. Notable tenants include Microsoft, hedge fund Citadel, private equity firm Thoma Bravo, insurer Marsh, and law firm Kirkland & Ellis.

While many office markets across the U.S. grapple with high vacancy rates post-pandemic, Miami’s office market remains robust. About 90% of the tenants at 830 Brickell have relocated from major markets like New York and Los Angeles. The Miami office rental market first drew attention in January 2022 when rents surpassed $100 per square foot, aligning with high-profile markets like New York City.

The 57-story tower, developed by OKO Group and Cain International, began leasing in late 2019 with rates close to $60 per square foot. Notably, Citadel has recently expanded its presence in the building, reportedly paying $150 per square foot for its additional space.

In response to increasing demand, several high-end office towers are under construction in Miami, with more than 1.8 million square feet currently being developed. Citadel founder Ken Griffin is among those planning new projects, with a $1 billion waterfront development in Brickell set to include office space, retail outlets, and a luxury hotel.

Source: ft.com