South Florida’s office investment sales have increased over the past year, though signs of distress and discounted deals remain due to high interest rates and ongoing economic challenges.
According to CBRE data, the tri-county region recorded nearly $2.2 billion in office deal volume during the 12 months ending September 30, 2025. This represents a 28 percent increase from the previous year and is double the $1.1 billion in sales seen during the lowest point in five years, which was recorded in the period ending September 30, 2023. However, this activity still falls short of levels reached during the pandemic boom, when $3.9 billion in deals closed by September 2021.
“It’s definitely gotten better than it was two years ago. It will come back like a Phoenix,” said C. Todd Everett of Lee & Associates. There’s “starting to be an appetite for office.”
The lending environment has also started to improve after a period when financing options were limited due to rising interest rates. Commercial mortgage-backed securities and debt funds are returning to office lending, while life insurance companies and pension funds are gradually re-entering the market. Banks remain cautious about office loans.
“The big banks are willing to selectively do high-quality office properties, and the local and regional banks are now making some office loans, and it’s very borrower specific,” said Chris Lee of CBRE. “They might want to see deposits increased by the borrower, and some recourse worked in.”
Loan spreads have narrowed slightly but loan-to-value ratios have not changed much.
All-cash transactions have been notable this year. Amancio Ortega purchased Miami’s Sabadell Financial Center for $274.4 million without financing, reflecting sellers’ preference for cash buyers who can offer certainty.
Despite these positive trends, several properties have experienced distress or sold at significant discounts. R&B Realty lost its Gateway at Wynwood building through foreclosure after completing it in 2021. Other owners managed to avoid foreclosure auctions; for example, Columbus Center in Coral Gables was sold for $76 million after facing a foreclosure suit over a delinquent loan.
Other examples include Foundry Commercial selling Sawgrass Lake Center at a roughly 36 percent discount from its prior price, and Rockpoint along with partners selling One Clearlake tower for about 26 percent less than they paid four years earlier.
“The trades you are seeing in the market are largely due to debt maturities,” said Douglas K. Mandel of Marcus & Millichap. “If you put floating-rate debt on loans [issued] in 2022, I think you are in a bad situation… They are kind of forced to make a decision, whether they put new equity into a deal, or they sell it.” Mandel added that discounted sales do not necessarily signal widespread distress; current conditions allow investors more buying power for higher quality buildings.
Private investors and family offices became more active buyers as institutional investors pulled back over recent years but institutions are beginning to return slowly.
Although the Federal Reserve lowered interest rates twice by 25 basis points each this year following aggressive hikes in 2022-23, experts say this is not enough relief for landlords with floating-rate debt or those seeking refinancing because benchmark Treasury yields remain elevated.
As borrowing costs stay high compared with prior years, prices remain below their peak but pressure is easing somewhat.
“I don’t think we are going to see ‘21 prices soon,” Lee said. “But we are absolutely above ‘23 pricing.”
