With vacancy holding steady at 4.1% and rental rates continuing to climb, it is a great time to be a landlord. But, we have seen a decrease in absorption three of the last four quarters, and our total vacancy has increased for three quarters in a row. As we have seen each quarter since 2010, warehouse rental rates show no sign of slowing down.
The one area where the market has softened is in the 25,000 sq. ft. and above range. Because of all the new warehouses that have been constructed, if you are a tenant looking to lease space, you have many options. Don’t think you are going to get Hialeah prices in Doral, but tenants seeking 25,000 sq. ft. can pick where they want to go and, with the right tenant broker on their side, they can get a good deal.
With almost 3,000,000 sq. ft. of warehouse space under construction in Miami-Dade County, the warehouses keep going up. With Flagler now building at County Line Corporate Park, Prologis continuing construction in Beacon Lakes and several of the newly constructed Miami warehouses still sitting empty, based simply on supply and demand, one could conclude that we should see a slight decrease in the pricing on those larger Miami warehouse spaces, but no landlord is looking to lower prices at this time.
There is still a lack of inventory of warehouses for sale. If a warehouse owner has a functional warehouse and is looking to “right size” their business, retire, or move out of the area, now is a great time to sell. Sale prices are high, demand is high, supply is low and investors are purchasing properties (sale-leasebacks) at low cap rates. Some industrial sites are even getting into multiple offer scenarios, some even taking back up offers.
Some of the larger leases signed during the 3rd Quarter included: Triton Logistics, Miami-Dade Police Department, Workscapes, and Florida International Group.
If you’d like more details or updates on the Miami industrial market or have questions concerning your real estate decisions, don’t hesitate to contact us here or give us a call at 305-807-7662.