Lee & Associates South Florida Q4 Report: Office Market Resilience Stands Out as Other Sectors Remain Flat
Office
South Florida closed the fourth quarter of 2025 with an 8.6% office vacancy rate, slightly up from 8.4% a year earlier. The average asking rent jumped year-over-year from $37.37 per square foot triple-net (NNN) to $39.81 per square foot.
“The South Florida office market solidifies its position as one of the top location options for wealth management fi rms," said Bert Checa, Principal at Lee & Associates South Florida. "South Florida will host three key hedge fund investment events during the first quarter of 2026. This activity continues to support growth and is a driving factor that has kept vacancies in the 8–8.5% range over the past four quarters, while pushing a noticeable upward trajectory in both price per square foot and rental rates. Upcoming changes to the Fed Chair remain top of mind for buyers and property owners as they look ahead to underwriting deals and restructuring debt at more favorable terms."
Industrial
South Florida’s industrial vacancies rose in the fourth quarter, from 4.8% to 5.7% year-over-year. The average asking rent increased from $16.96 per square foot triple-net (NNN) to $17.35 in the same span.
"South Florida’s industrial market wrapped 2025 in a period of continued recalibration, with 12-month net absorption at negative 1.38 million square feet and vacancy rising to 5.7% amid an inventory approaching 497 million square feet," said Greg Milopoulos, Principal at Lee & Associates South Florida. "Average NNN deal rates for spaces over 25,000 SF hovered around $16.35 PSF, higher in Miami, lower in Broward, while sales averaged $212-$215 PSF, with Class C properties in Hialeah trading below $197 PSF and premium assets exceeding $225 PSF. Cap rates averaged 6.09%, and under-construction space declined to 5.23 million SF, signaling moderated new supply. Notable transactions, including the 794,230 SF lease in Miami Gardens and the $124.5 million Pompano Beach sale, reflect ongoing demand for high-quality properties as the market moves toward stabilization."
Retail
Retail vacancies inched up in the fourth quarter, from 3.1% a year ago to 3.3%. Average asking rents dipped year-over-year, from $36.16 per square foot NNN to $35.59.
“South Florida’s Retail market closed 2025 demonstrating continued stability following a 3-4 year period of accelerated growth," said Stephen DeMeo, Principal at Lee & Associates South Florida. "Vacancy remained historically low, ranging between 3.2% and 3.5% throughout the year, while average asking rents held firm in the mid $36 PSF NNN range despite moderating absorption. Capital markets activity was led by grocery and necessity-based retail, with average sale prices for these assets generally ranging between $350 and $450 per square foot. Publix was notably active in 2025, acquiring 8 shopping centers across the region and reinforcing investor confidence in long-term fundamentals. Entering 2026, disciplined development and strong demographic trends are expected to support occupancy and pricing stability throughout the region."
Multifamily
South Florida’s multifamily sector also had a modest vacancy rate increase in the fourth quarter of 2025, from 6.4% to 6.7%. Asking rents increased year-over-year from $2,271/month to $2,287/month.
"Multifamily continued to hold steady in Q4 2025 and showed resilient signs across most metrics. Asking rents held fi rm and cap rates ticked down quarter over quarter," said Todd Cohen, Principal at Lee & Associates South Florida. "That said, net absorption decreased and indications from many across the industry are that concessions are playing a larger role in lease-up again. This could be a sign of headwinds as the market continues to digest what has been the most significant development boom in its history. With continued uncertainty surrounding tariffs, the recent activity in Venezuela, as well as higher costs for development and building operations, its unlikely that our market can sustain its torrid growth. Still, another rate cut in December and a lack of any seriously destructive hurricanes in 2025 could bring positive change."
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