Warehouse leases are up by 37% year-over-year, thanks to the strength of the South Florida economy and the popularity of remote work.
Malcolm Butters’ firm has been building industrial properties in South Florida for about 30 years. But the last three or four of those years have been nothing like what came before.
Companies such as Butters Construction have been forced to adapt to changes within an industrial market that has seen a massive influx of institutional capital from the likes of Blackstone and Prologis. Thanks to the rise of Amazon and e-commerce, these firms — especially Blackstone, which has north of $500 billion in assets under management — are paying top dollar for institutional properties.
That makes it difficult for smaller players like Butters to compete for deals to buy and develop new properties, especially in a place with little land left to build.
Industrial markets throughout Florida are experiencing a return to pre-recession occupancy levels and rental rates, according to a newly released Cushman & Wakefield report.
Statewide, second quarter rents stood at $7.03, with occupancy at 95.1 percent. Year-to-date, industrial absorption increased to about 3.7 million, according to the report.