South Florida 2026 U.S. Real Estate Market Outlook Midyear Review

Executive Summary 

Office

Leasing activity remains steady at 3.7 million sq. ft. in H1 with renewals accounting for nearly half of total volume. Prime submarkets like Brickell and West Palm Beach have tightened to a 6% combined vacancy rate, while best-in-class assets captured record rents above $150 per sq. ft. — more than double the previous cycle high. Older properties continue to struggle with vacancy exceeding 20% in several locations. Capital markets momentum is building as private and institutional investors re-engage with well-leased prime assets.

Industrial

Demand has shifted from speculative expansion to operational need, led by logistics providers, manufacturers and distributors prioritizing functionality over lease terms. Net absorption has already surpassed the full-year 2025 total with higher-quality space driving all positive absorption in H1. Overall availability reached a near-record 10% but is expected to decline as the construction pipeline approaches historical lows. Rents remain elevated for modern well-located assets while total occupancy costs continue rising due to higher property taxes and insurance.

Retail

National and luxury retailers are aggressively competing for prime space driving overall availability below 4% — well below the 4.7% national average. South Florida retail sales have grown 50% to more than $220 billion with grocery-anchored centers leading performance. Rents are expected to increase nearly 4% year-over-year in H2 and investment volume approached $1.5 billion in H1 nearing the record set in 2025 driven by strong investor confidence and pricing power.