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.
TRENDS
- 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.
Also read: Part One: Overview | Part Three: Coconut Grove | Part Four: Brickell | Part Five: Downtown Miami | Part Six: Conclusion
About the Authors:
Verity Mosquera: Accomplished research analyst and project manager, Verity Mosquera, uses her experience in analytics, leadership, and international business to monitor the global economy and its impact on the commercial real estate market. She oversees research operations, manages a team of Research Analysts, and supports the company’s brokers primarily in the South Florida offices. Verity understands the needs of our clients and works to deliver top-notch market research and analysis to help them make the most informed real estate decisions.
Haley Boatright: As a Research Analyst in the Miami office of Colliers International South Florida, Haley supports the research needs of the Colliers South Florida team. She is responsible for providing information resources and research, and a platform of comprehensive commercial real estate market data. Haley is accountable for the preparation and writing of quarterly market reports in addition to assisting team members in ongoing and ad hoc research projects by providing market trend analysis and forecasting along with direct research support.