Miami warehouse demand may outstrip construction

Like construction of condos and retail centers in Miami-Dade County, warehouse construction in the western part of the county is approaching levels unseen since the real estate cycle that ended in the late 2000s. But it may not be enough to keep up with industrial market demand.

Brokerage firm CBRE Inc. reported a 3.8 percent mid-year vacancy rate among warehouses larger than 10,000 square feet in Miami-Dade County.

Other industrial brokerage firms agree that warehouse space is scarce in Miami-Dade, and many expect a faster rate of absorption than construction in the foreseeable future.

Commercial real estate services provider Transwestern estimates that the warehouse vacancy rate will fall from 5.4 percent to 4.9 percent in the next 12 months.

Walter Byrd, managing director of Transwestern, said the leasing of warehouse space in Miami-Dade “is going to outpace new construction. Most of the new buildings that are under construction have been absorbed.”

Companies that want to expand or upgrade from older warehouse space comprise a robust market for newer warehouses with 30-foot clearances, said Mort Fetterolf, vice president of Colliers International in Miami. Colliers calculates a 5 percent warehouse vacancy rate in Miami-Dade.

“Landlords are pushing the asking rate to $9 [per square foot] but in reality, when they sit with a big 100,000-square-foot lease, it’s going to be for $8.50,” said Fetterolf. [Daily Business Review] — Mike Seemuth