Decelerating leasing activity and slower rent growth are beginning to signal a shift in South Florida’s commercial real estate market, according to experts who spoke at the CCIM Institute Florida Chapter’s annual outlook conference. Despite these changes, analysts expect the region’s commercial property sector to remain healthy throughout 2026.
Retail properties, particularly grocery-anchored shopping centers, continue to outperform other markets nationwide. Carrie Smith of Franklin Street said that retail fundamentals are strong and landlords have experienced rent increases since the pandemic. “If you are a well-positioned asset, you’re probably feeling pretty good,” Smith stated.
Grocery-anchored centers maintain high occupancy rates—averaging between 95 and 96 percent—compared with lower rates for unanchored properties. Seven of last year’s largest retail transactions involved outdoor shopping centers, which sold for a combined $636 million and made up more than half of the $1.2 billion total for the top 11 deals, based on an analysis by The Real Deal. Half of these major transactions were anchored by grocery stores.
Smith attributed much of this momentum to population growth and business expansion in Florida. She also noted that the elimination of sales tax on commercial leases in 2024 was beneficial for retailers and restaurateurs. Miami retail rents rank among the highest nationally. “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 volatility since 2024 following a period of strong tenant demand and rising rents in downtown submarkets during previous years, 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.” He pointed out notable distress last year: Rockpoint sold One Clearlake office tower at a significant discount, while R&B Realty lost Gateway at Wynwood through bankruptcy auction.
Despite challenges, certain submarkets have seen substantial rent growth. “Brickell went from $65 a foot to $150 a foot,” Killingsworth explained. High-profile deals include Amancio Ortega’s $275 million purchase of Sabadell Financial Center and a $630 million refinancing for 830 Brickell.
Other areas such as Coral Gables have become attractive alternatives for financial firms seeking shorter commutes and lower costs than Brickell offers.
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 market has cooled after several years of rapid expansion, Edison Vasquez from CommReal reported. Vacancy rates increased slightly—from five percent to six percent—creating more balance favoring tenants; incentives like improvement allowances or moving expenses are now common as landlords seek to avoid vacancies.
Sales activity remains robust despite higher vacancy rates: end users pay up to 15 percent more than investors per square foot on average sales prices ranging from $275–$300 per square foot; Blackstone sold nearly $1.9 billion worth of warehouse portfolios last year.
Land pricing remains an issue as sellers’ expectations exceed what developers can pay—a gap Vasquez expects will need resolution this year.
Vasquez added that limited inventory should keep values high even as operators face pressure from property taxes and insurance costs: “People are waiting for prices to collapse,” he said.“We don’t see that happening.Prices will continue to stay strong due to limited availability and lower interest rates.”
In multifamily housing across Miami-Dade County, Mitash Kripalani from Cushman & Wakefield described stabilization after several years marked by sharp rent increases driven by migration during COVID-19 peaks.“Rising interest rates slowed down transaction activity,but pricing per unit has remained stable because of strong demand and disciplined investors,” he said.
Development is ongoing at scale: about 50,000 units are under construction across South Florida—with over 30,000 located within Miami-Dade alone—primarily concentrated in dense urban areas with access to transit options.Kripalani noted,“Developers are choosing dense, walkable transit-oriented locations with strong employment drivers.”
Some projects were shelved or sites sold off last year amid higher borrowing costs,but easing financial conditions could renew investment momentum.Kripalani concluded,“Stable occupancy,stable rents,and improving liquidity is setting the stage for a gradual recovery.”
