Lee & Associates South Florida Q3 Report: Industrial Market Rebounds as Office and Multifamily Sectors Gain Momentum

Region's retail sector maintains strong fundamentals amid rising rents and selective investment activity in third quarter of 2026

MIAMI, FL (October 29, 2026) – South Florida's industrial market showed signs of a turnaround during the third quarter of 2026, returning to positive net absorption after more than a year of negative activity, according to Lee & Associates South Florida's Q3 2026 market report. The region's office and multifamily sectors also demonstrated improving fundamentals, while retail continued to benefit from constrained supply, strong demographics and sustained demand for premier locations.

Industrial

South Florida's industrial market recorded 526,766 square feet of positive 12-month net absorption in the third quarter, a significant improvement from the 3.5 million square feet of negative absorption recorded one year earlier. Vacancy declined from 6.7% in the previous quarter to 6.5%, while average asking rents increased year-over-year from $17.29 to $17.82 per square foot triple-net (NNN). Construction activity also declined substantially, signaling a more balanced supply outlook.

"South Florida industrial showed signs of a turn in the third quarter. Twelve-month net absorption moved positive at 527K SF after more than a year of negative absorption, and vacancy edged down to 6.5%. Asking rents reached $17.82 NNN and sales pricing averaged $268 per square foot. The construction pipeline fell to 3.8M SF, down 52% from a year ago, which should limit new supply. Walmart’s 235,812 SF lease in Medley and Ares’ $65.3M purchase in Hialeah shows continued user and investor demand. Now is a good time for owners and tenants to explore their options."

- Christian Baena, Principal at Lee & Associates South Florida

Office

South Florida's office market continued its positive momentum, with vacancy declining year-over-year from 8.5% to 8.2%, its lowest level in the past year. Average asking rents climbed from $38.97 to $41.90 per square foot NNN, while 12-month net absorption improved to a positive 376,922 square feet, reflecting sustained demand driven by corporate relocations and capital inflows.

“The South Florida office market continues to benefit from the recent trend of billionaires moving to Miami and Palm Beach, relocating their corporate HQs for tax benefits.  Low vacancies, record high rental rates and increase absorption are all closely tied to corporate executives purchasing homes in South Florida. 67 billionaires now own homes in Palm Beach County, up from 43 in 2020.  Miami Dade is now home to 25 billionaires up from 17 in 2020. This increase in wealth relocation to South Florida is playing a significant role in the local market resilience and capital inflow. Vacancy now at a year low 8.2% and expected to drop below 8% by first quarter of 2027."

- Bert Checa, Principal at Lee & Associates South Florida

Multifamily

South Florida's multifamily sector continued to strengthen during the third quarter, with vacancy declining significantly from 6.7% a year earlier to 6.0%. Average asking rents increased year-over-year from $2,291 to $2,331 per unit, while 12-month net absorption rose to 17,921 units, underscoring continued demand despite higher borrowing costs and broader economic uncertainty.

"South Florida’s Multifamily sector remains strong through Q3 2026. Net absorption is trending stronger than 2025 and vacancy rates continued to fall significantly. Despite rising interest rates, sales cap rates fell. Asking rents continued to move up while overall inventory and construction in the space remained stable. The sector continues to outperform most other sectors in South Florida, and South Florida continues to significantly outpace the rest of the US across all metrics. There are still headwinds stemming from global conflicts and rising costs, but for now, South Florida Multifamily seems immune."

- Todd Cohen, Principal at Lee & Associates South Florida