More than 70 industrial owners and representatives convened recently for Colliers International’s 13th Annual Industrial Owners Forum. During a roundtable discussion, attendees offered their views for 2020 and came to a consensus as to the drivers fueling demand for industrial space in the Miami area.
E-commerce and demand for cold storage are among the main drivers.
“Activity has maintained its momentum in February,” Erin Byers, Colliers’ South Florida Director of Industrial Services, tells GlobeSt.com. “There has been increased demand for distribution centers for e-commerce and some food users have seen quite a bit of activity.”
Byers notes that several warehouse tenants are implementing robotics to increase delivery speed for last-mile delivery for e-commerce.
Fully robotic systems are commonplace in new facilities. Developers are building clear heights, up to 36 feet, to boost cubic square footage as a way to overcome land scarcity. In their effort to maximize site coverage, some developers are opting for front-loading facilities rather than rear-load. Colliers expects to see an increase in new modern, urban warehouses close to sense population centers.
Hospitality, especially with the cruise lines, continues to grow, but not at as accelerated a pace as ecommerce, Byers says. While e-commerce has been driven by Amazon, there hasn’t been a real competitor in the market. However, Byers predicts that within the next 12 to 18 months, a large competitor will enter the market.
“It’s something our industry is speaking quite a bit about but who that will be we will see,” she says.
Cold storage demand primarily comes from a variety of food users. Byers says there has been a lot of food companies looking for expansion. “
It’s due to a blend of hospitality doing well, as well as grocery stores continuing to expand,” she says.
Byers predicts that there will be a steady flow of deals through the first quarter, but expects things to slow during the second half since 2020 is an election year, but she doesn’t anticipate a significant change.
“South Florida continues to be a top-tier market,” Byers says. “Our economy is strong and there is a lot of capital to be deployed. Challenges include the continuing rise of land prices.”