A report by The Kaplan Group highlights Miami and Jacksonville as standout cities in the national office loan market, maintaining lower vacancy rates and quicker rental turnovers compared to struggling financial hubs like San Francisco, Seattle, and Houston.

Miami and Jacksonville have emerged as exceptions in a national office loan market struggling with rising vacancies and potential defaults.

A report published in July fby The Kaplan Group highlighted the two Florida cities for their strong performance, in contrast to major financial hubs like San Francisco, Seattle, and Houston, which face growing risks of office loan defaults.

According to the report, Miami and Jacksonville have some of the lowest vacancy rates and quickest rental turnovers in the country. Office spaces in Miami stay on the market for a median of 278 days, while Jacksonville sees a median of just 163 days—both well below the national average of 334 days. In comparison, cities like San Francisco, where office spaces sit empty for a median of 599 days, and Hartford, where vacancies can exceed three years, are at higher risk of defaults.

Several factors are driving the favorable conditions in Miami and Jacksonville. Both cities have benefited from population growth, which has bolstered demand for office space. Florida’s business-friendly policies and competitive rental markets have also helped attract companies and maintain lower vacancy rates. This has allowed the two cities to avoid the prolonged vacancies and rising risks that other financial districts are facing.

“Financial districts in … Miami are facing the least challenges,” the report states. “Miami ranks the lowest with a score of 0.088, showcasing the best market conditions among the evaluated cities, driven by low vacancy rates and shorter days on market.

The report ranks San Francisco, Seattle, and Houston as the financial districts most at risk, with San Francisco topping the list due to high vacancy rates and steep rent prices of $4 per square foot. In contrast, Miami and Jacksonville’s lower vacancy rates and quicker leasing times have kept them relatively stable, with Miami scoring the lowest risk of office loan defaults among U.S. financial districts.