2013 Miami Industrial Market
It's 2013 and Miami warehouse market activity is in full swing. Miami's industrial market has been active with new construction, Port Miami's continuing of the deep dredging, large tenants looking at possible new spaces and a large bankruptcy. Industrial institutions such as DCT Industrial Trust, KTR Capital Partners, Prologis, Flagler, Liberty Property Trust and Industrial Income Trust started development of new projects in 2012 which they are currently finishing, and some have developments which will break ground in 2013.
Over 1,200,000 sq. ft. of Miami warehouse space is being built on the speculation that tenants will leave their current locations to occupy the new Class A warehouse space or new companies will come into the Miami market. A few highlights through February 2013:
Except for one small space, DCT Industrial Trust has completely leased their two new Class A warehouses, totaling +/-334,000 sq. ft., in Pan American West. Schenker leased both buildings except for a +/-17,000 sq. ft. space, which DCT is building out 10% office space in hopes to have it ready for a tenant's need for a quick occupancy. Based on the current market, that space should be leased by the end of March.
KTR is finalizing the construction of their new Class A warehouse, also in Pan American West. This is a single building of over 330,000 sq. ft. They have yet to lease any space.
Prologis continues to build warehouses in Beacon Lakes.
There are several large tenants, over 100,000 sq. ft., in the market looking at possible new Miami warehouses, but there is also always the chance they do a lease renewal at their current location.
The big story over the last two weeks has been Banah International Group. Banah International Group, a large sugar company, has gone into bankruptcy under Chapter 11. They plan on repaying their debt and restructuring. They were leasing over 300,000 sq. ft. of warehouse space in Hialeah. Terreno Realty Corp, as California based REIT, was the landlord. Terreno Realty Corp has plans to put the property, 215 SE 10th Avenue, in Hialeah, back on the market for lease.
Just a few buildings from the Terreno property is what is becoming known as Miami International Logistics Center (MILC), 725 SE 9th Court. This property is currently owned by AMB, but is under contract and could quickly become the largest available contiguous warehouse space closest to Port Miami and Miami International Airport. This warehouse is close to 500,000 sq. ft., is on CSX rail, is fully fenced, and sits on 20 acres which allows for extra trailer parking.
SeaFreight Agencies leased 150,000 sq. ft. of warehouse space, in Doral, at 9950 NW 17th Street. The warehouse is owned by IndCor Properties. In 2012, IndCor acquired a few buildings within International Corporate Park from Prologis, but had been slow to fill the space. This was a good deal for the market and a great deal for the tenant.
Asking rental rates and vacancy are projected to remain stable
University of Miami leased 70,500 sq. ft of warehouse space, inside of First Industrial's 142,804 sq. ft. warehouse, at 6891 NW 74th Street. This warehouse had been vacant for several years.
Interest in the Miami industrial market from U.S. based firms, as well as international investors is going to continue.
As the amount of available land diminishes and the large warehouses continue to trade hands among the REITs, the industrial REITs will start to look at new ways to create value in the Miami market.