Despite signs that South Florida’s industrial market may be cooling after years of rapid growth, a new report shows that demand remained strong in the second quarter.
In Miami Dade-County, vacancy rates held steady at 4 percent in the second quarter compared to the same period of 2018, even amid 725,000 square feet of newly completed construction, according to the Colliers International South Florida report.
Yet asking rents for these properties are starting to come down in Miami-Dade. Average asking rents for warehouses fell 1 percent to $10.07 in the second quarter of 2019, a sign that rents may be dropping after reaching record highs.
The largest industrial building completed in Miami-Dade this quarter was the 252,000 square foot warehouse at County Line Corporate Park in Hialeah Gardens.
A great deal of new industrial supply hit the market in Broward County.
Vacancy rates rose to 4.1 percent in the second quarter of 2019, up from 4 percent in the second quarter of 2018. The slight increase reflected 531,552 square feet of newly completed industrial properties.
Rental rates went up to $8.76 in the second quarter from $8.21 a year earlier, the report shows.
Broward County also recorded the largest transaction in South Florida during the quarter with Extra Space Storage’s purchase of 15 self-storage facilities for $104.4 million.
Due to the lack of available land, developers in Broward County are increasingly buying smaller industrial sites to develop a single distribution building of 100,000 square feet or less, according to the report. Some of these sites total just 4 or 5 acres.
Palm Beach County
Palm Beach County has seen strong demand for new industrial properties. At the recently completed Duke Realty’s Turnpike Crossing in West Palm Beach, Amazon signed a lease for about 100,000 square feet and SIW Solutions leased more than 161,000 square feet, the report shows.
There were very few big industrial sales in Palm Beach County during the second quarter, as most of the closed sales were for less than $10 million, according to the report.
Across Palm Beach County, 573,903 square feet of industrial space was under construction in the second quarter.
Overall vacancy rates increased to 3.3 percent in the second quarter of 2019 from 2.9 percent in the second quarter of 2018. Meanwhile, rents increased $8.67 from $8.60 during the same time period.