The Covid-19 pandemic, among many other factors discussed in this report, have propelled a mass corporate migration to Miami-Dade County. Companies and people alike have been enticed to the County’s low tax policies, looser Covid restrictions, economic incentives, and lower overall real estate costs.
Over the past year, momentum has been building and a clustering of technology, financial, and wealth management companies has taken formation creating one of the largest emerging fin-tech hubs in the nation. You can read more about this formation in our Q1 2021 Miami-Dade County Office Market Report.
Explore Miami Beach’s office and luxury residential market in part two of this six-part series.
Miami Beach Office Market Overview
Located in the heart of a world-class entertainment district, office space in Miami Beach is in high demand due to its proximity to Lincoln Road’s promenade of 200-plus retail shops and restaurants, as well as the numerous luxury hotel offerings nearby catering to corporate clients. Historically, Miami Beach has offered one of the strongest tourism and retail trade markets in Miami-Dade due to the high traffic of visitors as well as the year-round and seasonal residents.
Average asking rents for Class A space have rebounded to $56.66 per square foot, an increase of 10.2% year-over-year. This is the largest rent growth among the four markets reviewed within this report.
Miami Beach is a highly supply-constrained submarket, particularly in terms of viable office space. Developing new office space is often difficult, as high land prices have propelled most investors toward luxury hotels or boutique condo projects. These constraints also helped keep demand high relative to supply.
Of the largest tenants in Miami Beach, Royal Caribbean received approval from Miami-Dade County government for their proposal of a new 350,000 square-foot headquarters on Dodge Island, adjacent to the Port of Miami. Additionally, Starwood Capital headquarters, 144,430 square feet of Class A office space, is expected to deliver in the second half of 2021.
Miami Beach Residential Market Overview
The mass influx of tax burdened buyers relocating from Northeastern and Midwest states have propelled the luxury home market in Miami Beach.
While 2020 saw strong sales activity, 2021 is poised to hit new records with incredible growth in the volume of sales in Q1. In Miami Beach, 351 sales transactions above $1 million closed in Q1 2021 alone, compared to 91 in Q1 2020. The volume of sales in Q1 2021 alone surpassed the total number of sales in the years of 2019 (276) and 2020 (247).
Across the board, the sales prices per square foot have been increasing, and the number of days on the market (DOM’s) has remained stable or decreased, as the available listing inventory remains low.
Most notably, 23% of the sales in Q1 2021 were above $5 million reflecting the extent of the luxury residential demand in Miami Beach.
- 203% increase in closed transactions in Q1 2021 year-over-year for sales prices between $1 million and $3 million.
- 625% increase in closed transactions in Q1 2021 year-over-year for sales prices between $3 million and $5 million.
- 523% increase in closed transactions in Q1 2021 year-over-year for sales prices above $5 million.
- The average sales price of residential homes above $5 million in Q1 2021, increased by 44% over Q1 2020.
Download the full report here.