Transwestern Commercial Services’ South Florida industrial team represented SPR Global Storage & Logistics (SPR) in a new, long-term lease for an ±80,000-square-foot cold storage facility at the Beacon at 97th Avenue industrial park in Doral at 2000 NW 97th Ave.
At its core, South Florida is a narrow strip of land between the ocean and the Everglades. Those geographic constraints keep land prices rising, a phenomenon that is especially noticeable in the industrial sector, where rental rates are setting new records.
Miami’s average industrial asking rents reached an all-time high, $9 per SF, in Q4, according to CBRE, jumping nearly 50% in five years. JLL Managing Director Brian Smith said they have since inched even higher, with rates today around $10.25 per SF.
Miami’s industrial market is white hot and getting hotter. But clear trends are emerging at this stage in the cycle.
GlobeSt.com caught up with Brian Smith, JLL managing director and South Florida Industrial Lead, to get his thoughts on how much new industrial construction we can expect to see in the near future and the biggest leasing trend right now in part two of this exclusive interview.
GlobeSt.com: How much new industrial construction can we expect to see in the near future?
SMITH: Miami’s industrial stock has increased by more than 8.8 million square feet in the last six years in the Miami-Dade market, increasing at an average of more than 1.2 million square feet annually. Today, Miami has more new construction underway than any of its comparable industrial markets of Northern New Jersey, Seattle and Oakland.
The pipeline of new development is flowing with more than 4.1 million square feet under construction, and an additional 14.2 million square feet planned for future development. Considering the delivery of over 3 million square feet of new industrial product in the first half of this year alone, the Miami-Dade market continues to experience robust positive absorption and the delivery of new product is expected to continue over the next six to 12 months.
GlobeSt.com: What is the biggest leasing trend taking shape in Miami’s industrial market?
SMITH: In previous real estate cycles, the Miami-Dade market saw primarily smaller industrial leases signed in comparison to larger leases. This time, the opposite is happening: 40,000 square feet to 70,000 square feet is now becoming the typical size of industrial leases inked in the region.
In recent months, large users such as machinery manufacturer John Deere have been expanding in the market. Another example is KLX Aerospace Solutions that is expanding its distribution center and headquarters for a total of 500,000 square feet and Telemundo Enterprises/NBC Universal’s world headquarters taking up 550,000 square feet in Miami. These types of tenants were previously few and far between, but today they are responsible for the bulk of new absorption in Miami-Dade’s active industrial market.