Industrial space is growing in South Florida, and rates are still rising. Here’s whyDecember 25, 2019
Warehouse supply is expected to grow at the same rate in the new year as it did in 2019. But it still won’t be enough to satisfy demand in Miami-Dade and Broward, say experts. “We should continue to see strong robust demand in Miami-Dade and Broward,” CBRE industrial broker Tom O’Loughlin said. “Developers are still building.”
The primary driver: e-commerce, said George Pino, the president of the Doral-based commercial real estate brokerage company State Street Realty. As online sales increase, companies need to stockpile goods near consumers for quick delivery. “And online sales are still in the early innings,” Pino said.
An estimated 3.061 million square feet of spec warehouse development is under construction and expected to be completed by 2020 in Miami, according to the State Street Realty December 2019 Miami industrial competitive market summary. Nine projects are slated for completion in 2020. Duke Realty plans to open Miami 27 Business Park, comprising 700,000 square feet of storage at the intersection of U.S. 27 and Okeechobee Road. Flagler Global Logistics expects to add nearly 500,000 square feet to its Countyline Corporate Park at Northwest 170th Street. Lincoln Property Company is slated to construct 400,000 square feet at its Miami Axis Park in Hialeah.
In Fort Lauderdale, another 2.5 million square feet is underway and expected to be completed by 2020. That represents 1.7% of the current existing inventory, making it the largest square footage under construction in recent years, according to the State Street Realty December 2019 Fort Lauderdale industrial competitive market report.
A total of 28 projects are on the books for 2020. They include Helms Development will complete a total of 519,772 square feet for Vital Pharmaceuticals, Inc. at 20311 Sheridan St. in Pembroke Pines, and Black Creek Group will finish 221,000 square feet by May at 1380 NE 48th St.
Over the last three years, 4.233 million square feet was delivered, or 1.411 million per year. “Fort Lauderdale continues to play an important role in industrial because of Port Everglades and the airport,” Pino said. “Most industrial production is located on the major arteries is doing well.” Rental rates, as a result of increasing demand, grew by 4.8% in Miami and 5.1% in Fort Lauderdale over the past 12 months, according to the reports. “I expect the rates will go up in 2020 again,” Pino said.
Vacancy rates remained stable in Miami at 4% and 4.9% in Fort Lauderdale. The most active players of 2019, O’Loughlin said, will continue to lead the new construction in warehouse space come 2020, including Bridge and Prologis.
Retrieved from: Miami Herald