Two Miami Beach-area office projects are drawing out-of-state tenants even as overall office investment sales fell 11.5% across South Florida in the first half of 2026, according to a new Avison Young report.
One Kane, a 126,000-square-foot Class A+ waterfront office building at 9551 E. Bay Harbor Drive in Bay Harbor Islands, is rising on the Indian Creek Waterway with completion expected in early 2027. The Fifth Miami Beach, a five-story building at 944 Fifth Street in South of Fifth, recently opened as what developers have described as the neighborhood's first new commercial office building in 22 years.
Industrial and Multifamily Deals Offset Office and Retail Declines
The Avison Young report, released Tuesday, Aug. 11, found that total commercial real estate investment sales in the tri-county region reached $9.3 billion in the first half of 2026, a 19% increase over the same period in 2025. But the gains were lopsided: industrial deals surged 130.5% to $3.3 billion, and multifamily rose 19.4% to $2.5 billion. Retail fell 19.5%, offices dropped 11.5% and development sites posted the steepest decline at 23.1%.
Boutique Design Is Winning Over New-to-Market Tenants
The report specifically named One Kane and The Fifth Miami Beach as examples of a niche that is working: boutique buildings with distinctive design that attract new-to-market tenants willing to pay premium rents.
At The Fifth, designed by Spanish architect Alberto Campo Baeza and developed by Sumaida + Khurana and Bizzi + Bilgili, Italian restaurant Sant Ambroeus has leased the dining space. Brokers had a letter of intent as of late May for a full-floor office lease at $230 per square foot, gross, among the highest office rents in South Florida.
One Kane Offers Yacht Slips and Dock-to-Desk Access
According to a June press release, One Kane is developed by Miami-based Taubco and New York-based Landau Properties and offers private yacht slips with dock-to-desk access, floor plates of 12,000 to 18,000 square feet and a full-building generator. Laura Tauber, principal and managing director at Taubco, called it "the only Class A+ waterfront office building in Bay Harbor Islands" in "one of the most supply-constrained, wealth-concentrated geographies in the United States."
Nearby, The Well Bay Harbor Islands at 1177 Kane Concourse hit 90% pre-leased in its 96,000-square-foot office component after London-based Man Capital signed a long-term lease for 3,700 square feet in June.
Institutional Buyers Stay on the Sidelines Amid Rate Uncertainty
The broader market tells a different story. Michael Fay of Avison Young said elevated inflation at 3.5% and uncertainty over Federal Reserve Chairman Kevin Warsh's rate path are keeping institutional buyers away.
"When you have those two things going on, the institutional markets are like, 'We don't have certainty. Pencils down,'" Fay said.
Private investors now account for more than half of all commercial real estate buyers in South Florida, while institutional investors represent just 19%, down sharply from the pandemic boom. Development site sales fell to $789 million across just 41 deals as sellers struggled to find buyers willing to pay asking prices for raw land.
What to Watch: One Kane's 2027 Debut and the Fed's September Meeting
One Kane's early 2027 completion will test whether the appetite for boutique waterfront offices in Bay Harbor Islands holds. The Federal Reserve's September meeting could further shape that answer.
