CommercialCommercial Economic InsightaEconomic Insights

$4.7 Billion Commercial Sales Volume in Miami-Dade County in Q1-Q3 2023 with a Rebound Expected in 2024

MIAMI Commercal Economic Insights from the MIAMI REALTORS Chief Economist
MIAMI Commercal Economic Insights from the MIAMI REALTORS Chief Economist

By Gay Cororaton, MIAMI REALTORS Chief Economist

Commercial real estate transactions volume in Miami-Dade County during the first three quarters of 2023 totaled $4.7 billion, according to the Miami Association of REALTORS® (MIAMI) analysis of county property records from the Office of the Property Appraiser.


Commercial sales volume fell 52.2% from the same period one year ago as borrowing costs, pullback in commercial real estate lending created severe financing headwinds for investors. The Federal Reserve Board continued to raise the federal funds rate in 2023 to the current range of 5.25% to 5.5% from a range of 0% to 0.25% in March 2022. The failure of two regional banks in March 2023 further tightened credit conditions. The Fed also embarked on reducing its holdings of Treasuries to reduce the level of liquidity in the system. The Fed’s assets rose to $9 trillion in mid-2022 from $4 trillion, with asset holdings at $7.8 trillion as of November 2023.



Top asset sales: Residential land, industrial, and multifamily


Vacant residential land, industrial, and multifamily properties drew the most interest from investors during the three quarters of 2023. Residential vacant land sales volume during 2023 Q1-Q3 totaled $877 million, accounting  for 19% of sales volume. Industrial properties were the second most favored asset, with sales volume of $836 million, or 18% of total sales volume. Multifamily sales volume totaled $710 million, or 15% of sales volume. Sales volume fell below $500 million on transactions of retail ($490 M), office ($430 M), and hospitality ($310 M) properties.


Pockets of growth by asset type across markets


Among the incorporated municipalities, the city of Miami was the largest commercial market ($1.08 billion), followed by Miami Beach ($358 million), Hialeah ($277 million), Doral ($227 million), and Coral Gables ($224 million). On an aggregated basis, the unincorporated counties of Miami-Dade saw the largest sales volume, at $1.5 billion, about a third of total sales volume.


While overall transactions fell, there were pockets of growth. In Hialeah, sales volume of vacant commercial and residential land and retail properties increased. In Coral Gables, office sales volume rose. In Florida City, sales volume of retail and vacant commercial land rose. In Sweetwater, industrial sales volume increased. In Bal Harbour, there was an increase in hospitality (hotel/motel) sales. In Indian Creek, sales of private vacant land increased.



Commercial sales poised to rebound in 2024 as borrowing rates fall


The commercial real estate market is poised for a rebound in 2024 as interest rates decline and as sustained job growth, migration from other states and abroad, and the continuing recovery of tourism enhance the area’s positive outlook. The reduction of the state sales tax rate on the total rent charged for renting, leasing, letting, or granting a license to use real property from 5.5% to 4.5% effective December 1, 2023 improves Florida’s commercial outlook (Tax Information Publication (

Multifamily outlook: Modest rent growth in multifamily market


Rent growth is likely to trend upwards at a single-digit pace in 2024. The reduction in mortgage rates to 5.75% by December 2024 makes a home affordable for 36,000 renter households with over $100,000 in household income. Rents will rise modestly as some of the construction started in 2021-2023 is delivered to the market. Based on the housing permits issued as of September 2023, housing units authorized in 5-unit or more multifamily buildings could hit about 22,000 units in 2022-2023, double the 10,571 units in 2021.


Office outlook: Moderated rent growth and below 20% vacancy rate


Miami-Dade County’s office market outlook is fundamentally strong, with a lower vacancy rate than nationally and compared to other major gateway markets. As of 2023 Q3, the office vacancy rate was 15.6% compared to 19.4% nationally. In the other major markets, office vacancy rates are at over 20%: New York Downtown area (24%), Chicago (24%), Los Angeles (27%), and San Francisco (30%).


With a lower vacancy rate, the office asking rent rose 6% year-over-year to $50/sq. ft, a faster pace compared to 2% nationally. On the other hand, the asking rent was flat in New York and fell in San Francisco (-5%), Los Angeles (-2%), and Washington DC (-1%).


The construction that is underway is expected to lead to moderated rent growth and to keep Miami-Dade County’s office rents competitive ($50/sf) compared to the gateway markets of Los Angeles ($44/sf), Chicago ($34/sf), and Washington DC ($31/sf), the New York Downtown ($56/sf), and San Francisco ($71/sf). As of 2023 Q3, 1.4 million square feet, or 4% of the current inventory of office space.[1]


Industrial outlook: Rent growth to moderate at single-digit due to new construction


Demand for industrial space is likely to tick up as consumer spending picks in 2024, as consumers gain more purchasing power with inflation moderating towards 2.5%, barring any surge in oil prices and supply shortages.


With a tight inventory rate, the median asking rent rose 7% as of 2023 Q3 in the Miami metro area, to $15.4/sf, which is more than the national asking rent of $9.73. The Miami metro market has one of the lowest industrial vacancy rates, at 1.8%, compared to 4.7% nationally, and the largest port areas of New Jersey-Central (4.4%) and Los Angeles (2.1%).


New construction will tend to moderate rent growth in 2024-2025. As of 2023 Q3, 6.4 million of industrial space is under construction, equivalent to 4% of the current industrial inventory.


Retail outlook: Sustained migration, job growth, and lower inflation to bolster consumer spending in 2024

Sustained migration, job growth, the inflow of wealth into the area, and the ascendancy of the Miami metro area as an arts, sports, finance, and tech hub support a favorable outlook for Miami-Dade’s retail property market. Slowing inflation will also increase consumers’ purchasing power.


Retail asking rents are likely to continue to increase given the demographic tailwind and a low vacancy rate. As of 2023 Q3, the vacancy rate in the Miami metro area’s shopping centers was 3.3% compared to 5.4% nationally. The vacancy rate is not likely to increase significantly as the combined 2023 deliveries and under construction of 800,000 sq. ft. is equivalent to just 2% of the current inventory.


With a lower vacancy rate, the asking rent rose 7% year-over-year compared to 4% nationally. More construction will tend to temper rent growth and keep rents competitive. Compared to other gateway markets, the Miami metro area now has the highest median asking rent of $40/sf compared to $24/sf nationally, surpassing New York City’s median retail asking rent ($33/sf) as of 2023 Q3.


Land Market outlook: Lower interest rates, recovery of demand of for-sale homes to  bolster demand for land


Sustained migration and the demand will continue to drive residential land prices at a double-digit pace, especially as lower mortgage rates increase the demand for housing and lowers the cost of construction. Housing market conditions are likely to remain tight, at below 6 months’ supply for single-family homes, which will support sustained home price appreciation, and therefore the demand for vacant residential land.

[1] Office metrics on asking rent, vacancy rate, units under construction are from Cushman and Wakefield

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