The COVID Surge — And The Initial Pullback

When the COVID‑19 pandemic struck in early 2020, much of the United States — including South Florida — braced for a downturn. Indeed, a 2020 Q4 market report for the Miami–Fort Lauderdale–West Palm Beach metro described commercial real‑estate conditions as weaker than the U.S. average: office occupancy and rent‑growth underperformed nationally; industrial vacancy rose even as “more construction [was] underway than nationally.” National Association of Realtors+2National Association of Realtors+2

For offices, the effect was particularly sharp. By 2021, the Class‑A office segment saw large sublease backlogs and negative net absorption. In the second quarter of 2021 alone, more than 270,000 sq ft was returned to the market, and sublease space rose from 1.6 million to over 2.2 million sq ft compared to the prior year. Newmark+1

However, even during that slump, leasing activity was recovering: by mid‑2021, leasing in the metro had risen by ~2.8 million sq ft versus the first half of 2020. Newmark Similarly, residential and multifamily occupancies proved more resilient — hinting at shifting demand patterns as work‑from‑home, remote work, and changing lifestyles gained traction. National Association of Realtors+2CRE Daily+2

In short: commercial construction and CRE (commercial real estate) took a blow under COVID, especially in office and hospitality sectors; at the same time, rising sublease inventories and caution dampened new-build momentum.

Recovery & Boom — Why the Tide Turned

Macro Factors: Migration, Population Growth, and New Demand

Since around 2022–2023, South Florida has begun a strong recovery — driven not only by economic rebound but also by demographic and business shifts. Many firms and high‑earners relocated from high-tax, high-cost metros to South Florida, drawn by climate, lifestyle — and increasingly, business‑friendly policies. Florida Realtors+2Florida Realtors+2

That influx translated into demand for office space, retail, industrial, and multifamily properties across the tri‑county region (Miami‑Dade, Broward, Palm Beach). According to the latest data, commercial real‑estate sales across these counties rose 36% in 2024 to a total of $12.5 billion — a robust rebound after the prior 2‑year slump. Miami Realtors+1

Across property types, gains were broad-based: multifamily, office, industrial, and retail all saw substantial increases. Miami Realtors+2Miami Realtors+2

Now, vacancy rates are below national averages in many segments, and asking rents are rising at a faster clip than most U.S. markets. Miami Realtors+2Miami Realtors+2

Spotlight on Key Cities

Fort Lauderdale

In 2025, Fort Lauderdale has re-emerged as a leading hub for commercial deals in Broward County. In Q1, the city recorded the largest commercial‑sales volume in the tri‑county region, buoyed by large office and multifamily trades. Miami Realtors

After years without major new office‑building deliveries, the momentum is returning. That recovery underscores renewed market confidence — as companies reassess remote‑work strategies, hybrid models, and evaluate South Florida as a base for operations.

Still, Fort Lauderdale’s recovery also reflects broader regional drivers: population inflows, relocation of firms, and rising multifamily demand — not just local factors.

Miami

Miami remains the powerhouse of South Florida’s commercial real‑estate market. In 2024, Miami‑Dade’s commercial sales reached $6.2 billion, up 24% from previous years — with strong performance especially in office, retail, and industrial sectors. Miami Realtors+2Miami Realtors+2

Office-market fundamentals have improved markedly: many tenants are signing new leases, fueling demand for high-quality space. Meanwhile, multifamily and retail segments are strong — driven by the influx of new residents, relocated professionals, and companies moving their headquarters or regional offices to Miami. The Real Deal+2CRE Daily+2

In short: Miami’s commercial construction and real‑estate market appear to be outperforming not just locally but against many national metros — a testament to South Florida’s growing appeal.

Boca Raton & Palm Beach County (West Palm / West + Surrounding)

Further north, in Palm Beach County — including Boca Raton and West Palm Beach — growth is accelerating. In 2024, commercial sales in Palm Beach County rose 44%. Miami Realtors+2Great Report+2

Office demand in downtown West Palm Beach especially has surged, driven by finance firms, hedge funds, wealth‑management firms, and new institutional tenants leasing Class A office space in the central business district (CBD). According to recent reports, vacancy in top-tier office buildings in West Palm is among the lowest in decades, with asking rents rising significantly. Great Report+2ChadMassaker.com+2

Retail and industrial sectors remain active as well, with recent data showing positive net absorption in the industrial segment despite new deliveries — evidence of underlying demand. Colliers+1

As for Boca Raton, while less public “headline building” activity has dominated than in Miami or Miami‑Broward, there is steady demand for office and commercial space, particularly among firms seeking alternatives to central‑city congestion. Some recent reports note significant leasing activity by companies in Boca — underlining that the suburban office market remains relevant even in a shifting CRE landscape. HERE Tallahassee+1

The Policy Tailwind: Tax Reform & Business-Friendly Laws

A major structural shift boosting commercial real‑estate in South Florida is the recent repeal of the state’s unique tax on commercial leases — a previously‑heavy burden for tenants and investors alike. As of October 1, 2025, the former “Business Rent Tax” was completely eliminated via legislation (House Bill 7031) signed by the governor. Walter Duke + Partners+3The Florida Senate+3South Florida Agent Magazine+3

For tenants — from large corporations to small businesses — this means significantly lower occupancy costs. Estimates suggest the repeal saves Florida businesses hundreds of millions annually, and creates a more level playing field with other U.S. states. CRE Daily+2Construction Florida+2

For landlords and developers, the change increases net-operating income (NOI), enhances property valuations, and improves the attractiveness of commercial real estate investments. Walter Duke + Partners+1

Moreover, the law removes what many considered a unique penalty on doing business in Florida — and by eliminating the tax on base rent and associated costs (management, CAM fees, insurance, etc.) — the repeal simplifies leasing and reduces hidden costs that previously deterred some tenants. South Florida Agent Magazine+2MyLandTrustee.com+2

In combination with Florida’s broader pro-business stance — no state income tax, favorable regulatory environment, and growing population — this reform reinforces South Florida’s appeal as a major commercial and corporate hub.

What It Means — Looking Forward

  • Sustained construction & investment momentum: With commercial sales rebounding and occupancy strong across office, retail, multifamily, and industrial sectors, the conditions are ripe for more construction and redevelopment — especially in urban cores like Miami, Fort Lauderdale, and West Palm.

  • Spillover to suburbs and secondary cities: As businesses seek space with lower costs and easier commuting, expect growth to spread beyond city centers to places like Boca Raton and suburban Broward & Palm Beach County.

  • Incentive for corporate relocation & headquarters migration: The elimination of commercial lease tax — combined with no personal income tax — makes South Florida particularly appealing for companies relocating from high‑tax states.

  • Potential pressure on rents: As more space becomes available, landlords may face pressure to balance rents and occupancy. But given strong demand, vacancy rates remain below national averages, suggesting long‑term stability.

In short: South Florida’s commercial‑construction market has transformed dramatically over the past five years. What once looked like a risky, post‑COVID gamble is fast becoming one of the most compelling growth stories in American real estate.