Warehouse landlords are still in the driver’s seat, as median asking rents soared for most of South Florida’s industrial market in the second quarter.
Industrial landlords in Miami-Dade and Broward counties experienced rent growth of 9 percent and 17 percent, respectively, in the second quarter, compared to the same period of last year, according to a recent JLL report. Palm Beach County’s median asking rent remained relatively unchanged.
Vacancy rates in all three counties were below 4 percent, a sign that demand for warehouse space remains high, and new industrial spaces get quickly gobbled up, the report shows.
The second quarter also produced a flurry of major trades involving some national big guns in the commercial real estate game. For instance, Ross Perot Jr.’s Dallas-based Hillwood plunked down $106.5 million in April for a Jupiter distribution facility leased to Amazon. This month, Property Reserve, the Salt Lake City, Utah-based real estate arm of the Mormon Church, paid $56 million for a warehouse at Hialeah’s Beacon Logistics Park.
Miami-Dade County
In the second quarter, the median asking rent in Miami-Dade’s industrial market rose to $17.42 a square foot from $16.06 a square foot during the same period of last year, the report shows. The vacancy rate rose slightly to 2.3 percent in the second quarter, compared to 1.9 percent during the same period of last year.
Tenants in Miami-Dade leased 1.6 million square feet, and another 7.5 million square feet of warehouse space was under construction in the second quarter, the report states. MD Turbines Holdings signed the largest lease for 178,201 square feet at Countyline Corporate Park, a 2.2 million-square-foot industrial complex developed by Terreno Realty.
Also in the second quarter, Darien, Connecticut-based East Capital doubled its industrial portfolio in Medley by acquiring eight warehouses and a storage yard for $17.5 million.
Broward County
The median asking rent for warehouse space in Broward jumped to $16.18 a square foot in the second quarter, compared to $13.88 a square foot during the same period of last year, the report shows. In the second quarter, the vacancy rate remained stable at 3.2 percent, compared to 3.4 percent during the same period of last year.
Tenants leased more than 500,000 square feet of industrial space, but Broward experienced minimal new construction in the second quarter, as the county has the least amount of developable land in South Florida, the report states. Compass Group USA, a national company that provides meals to health care facilities, signed the largest lease in the second quarter for 69,697 square feet at an industrial complex in Miramar.
In the second quarter, New York-based Tishman Speyer made a big splash in Broward by paying $100.7 million for Rock Lake Business Center, a complex of two warehouses and a development site for two more warehouses in Pompano Beach.
Palm Beach County
The median asking rent in Palm Beach County inched up, year-over-year, with landlords asking $14.70 a square foot in the second quarter, compared to $14.07 a square foot during the same period of last year, the report shows. The vacancy rate in the second quarter hit 3.9 percent, a slight increase compared to 3.7 percent during the same period of last year.
Palm Beach County had 230,000 square feet of lease signings, including renewals, and 1.5 million square feet of new warehouse space was under construction in the second quarter, the report shows. The Parts House, an auto parts distribution company, signed the largest lease in the second quarter for 26,002 square feet at Landmark Commerce Center, a three-warehouse complex in West Palm Beach.
A joint venture between Orlando-based Foundry Commercial and Greenwich, Connecticut and Boston-based Wheelock Street Capital is among the developers that added more warehouses in Palm Beach County during the second quarter. In June, Foundry and Wheelock landed a $52.3 million construction loan to build Egret Point Logistics Center, a complex consisting of two industrial facilities in Boynton Beach.