Study: Puerto Rico’s private sector fuels office real estate market rebound
Leasing activity surged 150% in early 2025, led by coworking growth and private sector demand.
Puerto Rico’s office real estate market entered 2025 on a high note, with first-quarter (Q1) leasing activity up nearly 150% year-over-year — a rebound driven largely by private sector demand and the expansion of coworking spaces.
According to Caribbean Real Estate Services (CRES), total leasing volume reached 125,130 square feet in Q1, a sharp increase from 50,310 square feet during the same period in 2024. The increase led to a drop in office space availability from 21.5% to 17.5%.
The improvement is notable given recent headwinds, including the closure of several federal government offices, which added available inventory in traditional submarkets such as Hato Rey and Guaynabo. But private enterprise absorption helped offset the federal sector contraction, indicating gradual stabilization.
Top lease transactions this quarter included Piloto 151’s new 28,290-square-foot location on Ponce de León Avenue, One Alliance Insurance’s 42,330-square-foot move to Metro Office Park in Guaynabo, and Baxter’s 33,476-square-foot renewal in Rexco, also in Guaynabo. These moves reflect continued confidence in Puerto Rico’s urban office corridors, the study said.
The average asking rent rose to $20 per square foot, up from $18.50 a year ago. Class A space remained at a premium, holding steady at $25 per square foot.
Observers are watching U.S. tariff policies that could incentivize mainland-based companies to relocate to U.S. territories like Puerto Rico.
“The evolving dynamics of the office sector in Puerto Rico present both challenges and opportunities,” the CRES report states. “While the increase in vacancy rates poses short-term concerns, the growing interest from the private sector and the potential influx of businesses due to tariff policies could drive long-term growth and stability.”
The recovery is also supported by a broader return-to-office trend, which is reshaping workplace strategies and increasing demand for flexible leasing arrangements.
The coworking sector continues to grow, with examples like P&G’s 9,500-square-foot lease at Plaza 273. Sublease availability remains low at 0.23% of total inventory, indicating cautious but resilient tenant behavior in the post-pandemic market.
