Lee & Associates South Florida Q4 Report: Local Retail, Office Sectors Maintain Strength

Region’s multifamily and industrial sectors continue softening trend in fourth quarter of 2024

MIAMI, FL (January 27, 2025) – South Florida’s retail and office markets kept shining – especially in comparison to the rest of the nation – during the fourth quarter of 2024. On the flip side, the region’s multifamily and industrial sectors continued a softening trend from the previous quarter, but there are positive indicators early in the new year.

Retail

Retail vacancies remained extremely low in the fourth quarter, only inching up year-over-year from 3.0% to 3.2%. Average asking rents also increased year-over-year, from $36.07 per square foot NNN to $36.73.

“South Florida’s Retail market continues to exhibit robust performance as spending remains elevated relative to pre-pandemic levels, and although relatively muted, real consumption growth has returned in Q4 due to high consumer demands during the Holiday seasons," said Lee & Associates South Florida Principal, Stephen DeMeo. "The Tri-County region has maintained vacancy rates below 4% for 11 consecutive quarters, with a current rate of approximately 3.28%. Net absorption has declined, while the average asking rents have remained relatively flat. New retail space will likely come to market in small doses, so prospective tenants may have limited options in sought-after locations. Overall, the South Florida retail market demonstrates resilience, characterized by low vacancy rates, increasing rental rates, and sustained high investor interest, despite broader economic fluctuations" 

Office

The tri-county area of South Florida closed the fourth quarter of 2024 with an 8.4% office vacancy rate, slightly up from 8.1% a year earlier. The average asking rent climbed year-over-year from $36.50 per square foot triple-net (NNN) to $38.02 per square foot.

“With the elections in the rear view, 4th quarter 2024 gave us a glimpse of what the start to 2025 could look like," said Lee & Associates South Florida Principal, Bert Checa. "A strong demand for 2nd generation Class A space as Tenants continue to right size from older class B spaces into smaller class A spaces. New to market Tenants continue to absorb most of the new supply of first-generation class A office space. Vacancy held steady throughout 2024 hovering from 8% to 8.4%. The news of rate decreases in the upcoming FED meetings sparks an increase in sales activity. Average rental rates and sales prices continue a steady upward trajectory through 2024 and into 2025. "

Multifamily

South Florida’s multifamily sector recorded a year-over-year rise in vacancies in the fourth quarter of 2024, from 5.7% to 6.1%. Asking rents increased year-over-year from $2,184/month to $2,214/month.

"South Florida’s Multifamily sector is resilient, and Q4 showed positive signs across most metrics that it may have even 'bottomed' in Q3," said Lee & Associates South Florida Principal, Todd Cohen. "We use quotes because Multifamily has outperformed pretty much all asset classes in Florida, and geographically, South Florida has ranked among the strongest performing markets nationwide for a number of years now, 2024 included. To that end, vacancy rates and cap rates ticked down quarter over quarter, and net absorption increased, which bodes well as we head into 2025. With November’s election uncertainty resolved, and interest rates slowly trending downward, there is reason for optimism. Rental rates and sales numbers grew on a per door basis, so positive trends were pervasive throughout the sector’s key metrics. We hope this momentum continues into 2025."