The 200,214-square-foot lease by the aviation firm AeroTurbine at the end of August was the largest industrial deal in South Florida so far this year — and a sign of a still-tightening industrial market, brokers say. The previous largest deal in 2012 had been a 111,000-square-foot transaction by Transcor at Prologis Gratigny Industrial Park in Miami.
“There are real signs across the board [in South Florida],” said Brian Smith, executive director, industrial brokerage at Cushman & Wakefield. “First, it was really mainly in Airport West [in Miami] and Medley, but now what you’re seeing is rent rates trending up.”
It was also a positive indicator for the Broward County industrial sector, which has typically lagged that of Miami-Dade.
“We’ve seen that 2011 was a very good year for industrial real estate [in South Florida], and 2012 has been a good year to date,” he said. “We continue to see that trend — if you’re a [50,000] to 100,000-square-foot tenant in the North Dade market, you don’t have a ton of options.”
Miami-Dade’s industrial vacancy rate stood at a state-best of 6.2 percent at the end of the second quarter, according to data from CBRE. Broward County’s industrial vacancy was at 8 percent, though both were trending downward, according to the report.
“It’s good to see Broward County acquire another large tenant,” said Chris Spear, a commercial associate at ComReal in Miami. “”AeroTurbine is a noteworthy deal, not only because of its size, but because once an aviation firm expands to a facility, they typically make such significant investments that they end up staying in that location for a long period of time.”
AeroTurbine is also one of a number of aviation firms that have been looking to get a foothold in South Florida’s logistics chain – Spear said ComReal had handled seven deals with aviation firms in the last year.
“We’ve got a strong aviation trend [in South Florida],” he told The Real Deal. “We’ve seen some consolidation in the aviation industry.”
Spear said the spate of aviation deals was additionally a result of South Florida’s growing presence in international trade, which has been drawing a number of international logistics firms to the area in advance of the Panama Canal’s expansion.
But the deal was also part of a trend of industrial tenants looking north beyond the typical hub of Miami’s Airport West submarket, according to Smith.
“I think we’ve been seeing that trend over the last four or five years,” Smith said. “Companies who don’t really have to be in Airport West and Doral, really look to Medley, so if you don’t have to be right off tarmac, they’re open to looking — and have moved.”