Lee & Associates South Florida Q2 Report: Industrial Vacancies Jump Significantly Year-Over-Year

Region’s office, multifamily and retail sectors maintain strength in second quarter of 2025

MIAMI, FL (July 22, 2025) – South Florida’s industrial market experienced a surge in vacancies during the second quarter of 2025, according to Lee & Associates South Florida’s Q2 2025 market report. The region’s office, multifamily and retail sectors largely mirrored year-over-year trends from the previous quarter, however.

Industrial

South Florida’s industrial vacancies jumped substantially in the second quarter, from 4% to 5.4%. The average asking rent modestly increased from $17.23 per square foot triple-net (NNN) to $17.28 in the same span. Investor interest in local industrial portfolios remains robust, however.

"Broward County saw several large portfolio sales of institutional product closing at an average of $245 psf. These portfolios consist of newer product most importantly with income," said Lee & Associates South Florida Principal, Greg Milopoulos. "We’ve closed several large deals ourselves, most recently a 45,500 sf single-tenant industrial building simply for the fact that we were able
to secure a tenant ahead of going under contract. In some respects, if the property’s rents can be brought close to market $17.05 NNN range, you’ll continue to see values on class A product achieve over $230 psf and class C around $215 psf. Leasing has seen an uptick in deals over 30,000 sf in the last 3 months after experiencing 4-5 months of minimal activity."

Office

South Florida closed the second quarter of 2025 with an 8.7% office vacancy rate, slightly up from 8.3% a year earlier. The average asking rent climbed year-over-year from $37.37 per square foot triple-net (NNN) to $38.73 per square foot.

“The South Florida Office Market remains resilient and continues to outpace much of the country in terms of new supply as well as vacancy rates that trail the national average," said Lee & Associates South Florida Principal, C. Todd Everett, SIOR. "Downtown West Palm Beach in particular is seeing tremendous growth in its CBD office supply with nearly 2 million SF currently under construction with net rents in the low-to-mid $100 per square foot range. Vacancy throughout the MSA has ticked up around 10 basis points from the prior quarter while sales price PSF has
remained flat and cap rates have compressed slightly."

"The hyper land constraints of South Florida combined with population growth bodes well for the overall office market for the foreseeable future, despite rising rates, expenses and TI."

Multifamily

South Florida’s multifamily sector recorded a miniscule year-over-year increase in vacancies in the second quarter of 2025, from 6.2% to 6.3%. Asking rents increased year-over-year from $2,229/month to $2,256/month.

"South Florida’s Multifamily sector remains strong through the first half of 2025. Vacancy ticked up a bit from Q1, but is still lower than 2024 levels. Rental Rates, Sales Per Unit and Sales Cap Rates all remained stable at levels that show strength, further confirming South Florida’s multifamily properties are essential assets within investment portfolios for investors, both private and institutional," said Lee & Associates South Florida Principal, Todd Cohen. "With the uncertainty surrounding tariffs, inflation and global conflict presenting potential hurdles to keep in mind, the safety and universal utility of residential rental properties will continue to bolster the sector relative to the broader market."

"South Florida’s market in general, and its multifamily sector in particular, remain incredibly strong compared to the rest of the United States."