Low vacancy rates and record absorption served as jet fuel for South Florida’s industrial market at the end of 2021, according to a recently released report.
Tenant demand is so high that industrial developers are quickly filling up warehouses and logistics facilities. Miami-Dade, Broward and Palm Beach counties had a total net absorption of nearly 12 million square feet last year, the report by JLL shows. Landlords in the tri-county region raised rents to new highs as South Florida’s industrial market continues to experience a dwindling supply of developable industrial land.
In the fourth quarter of 2021, the average asking rent reached $10.30 a square foot, but landlords of Class A and newly constructed facilities pushed rates up to more than $11 a square foot, according to JLL.
E-commerce, consumer goods and distribution tenants powered new leasing activity, as the vacancy rate hit 2.6 percent in the most recent quarter, a new record for Miami-Dade, the report states. The market experienced a net absorption of 2.6 million square feet in the quarter, bringing the total net absorption to 7.8 million square feet for all of 2021 in Miami-Dade, crushing a previous high of 4.3 million square feet in 2015, according to JLL.
In 2021, warehouse company Carbel signed the biggest lease in Miami-Dade and in all of South Florida, inking a deal for 368,287 square feet at First Park Miami at 8801 Northwest 87th Avenue in Medley. First Industrial Realty Trust and Butters Construction & Development built the project.
In Broward, the vacancy rate hit 5.5 percent in the most recent quarter, compared to a little over 6 percent during 2020’s fourth quarter, the report states. Broward had a net absorption of 777,000 square feet in the fourth quarter of 2021, and a total net absorption of 3.3 million square feet for all of last year.
Like Miami-Dade, leasing surged in Broward as a result of e-commerce tenant demand that outpaced a diminishing supply of new industrial facilities. According to JLL, Broward’s industrial market had its strongest leasing year on record, with 8 million square feet of leased space. Entertainment lighting manufacturer signed the largest lease in the most recent quarter, for 154,000 square foot space in an industrial facility at 3360 Davie Road in Davie. IDI Logistics developed the 225,580-square-foot building.
The average asking rent in Broward increased by roughly $1, year-over-year, to $10.09 a square foot in the most recent quarter.
Palm Beach County
Among the three counties, Palm Beach County experienced modest growth in leasing activity, but the average asking rent still reached a new high at the end of last year. The vacancy rate dropped to 3.5 percent, compared to 4 percent during the same period in 2020, according to the report.
Amid a tightening supply, leasing volume fell in the most recent quarter, with a negative absorption of 62,208 square feet, the report shows. JLL found that developers are avoiding large-scale speculative projects in Palm Beach County, and that only a handful of new leases closed.
Deals included Safebound Logistics inking a lease for 38,700 square feet, and The Balanced Company taking 29,000 square feet, both at Prologis Airport Center. Prologis developed the industrial business park at 6017-6035 Southern Boulevard in West Palm Beach.
The average asking rent during the most recent quarter in Palm Beach County hit $9.94 a square foot, a new record, according to JLL.