South Florida Industrial | Q2 Update

Miami-Dade

The Miami-Dade Industrial market is comprised of 199 million square-foot of inventory ranging in size from the 78.8 million square-foot Miami Airport submarket to the 229,685 square-foot Outlying Miami-Dade submarket.

The average quoted asking rental rate for available Industrial space was $10.80 per square-foot per year at the end of the second quarter 2017 in the Miami-Dade market area. This represented a 1.2% increase in quoted rental rates from the end of the first quarter 2017.

Net absorption for the overall Miami-Dade industrial market was positive 277,072 square-foot in the second quarter 2017. That compares to positive 679,011 square-foot in the first quarter 2017 and 2,804,453 square-foot year-to-date.

Currently there is 2.3 million square-foot under construction in eight projects. Included are two buildings with a combined total of 537,200 square-foot at L&B Realty’s Airport North Logistics Park. July completions are expected for both. Breaking ground in February was the 330,000 square-foot PriceSmart Distribution Center. Flagler Global Logistics is the developer. Other activity includes two buildings with a combined total of 459,000 square-foot at County Line Corporate Park from Flagler Global Logistics.

Due to large deliveries in the last quarter vacancies increased slightly to 4.2% but as demand exceeding supply vacancies should drop to 4.0% by then end of 2017.

Broward

The Broward Industrial market is comprised of 128 million square-foot of inventory ranging in size from the 30.6 million square-foot Pompano Beach submarket to the 42,248 square-foot Outlying Broward submarket.

The average quoted asking rental rate for available Industrial space was $9.80 per square-foot per year at the end of the second quarter 2017 in the Broward County market area. This represented a 1.0% increase in quoted rental rates from the end of the first quarter 2017.

Net absorption for the overall Broward County industrial market was positive 257,042 square-foot in the second quarter 2017. That compares to positive 332,198 square-foot in the first quarter 2017 and 589,240 square-foot year-to-date.

During the second quarter 2017, two buildings totaling 37,500 square-foot were completed in the Broward County market area, which is only a fraction of the 689,874 square-foot of new space expected to be delivered over the course of the year. The largest and first to be delivered project is the Bridge Development’s 306,000square-foot Bridgepoint I-95 project on Sunrise Boulevard in Coral Springs, which is expected to be delivered by the end of July. In the same city, the 215,000square-foot expansion by Exeter Property Group at Sawgrass Bend Commerce Center broke ground in April. A November completion is expected for the 208,000square-foot Megacenter Miramar in that city. Three Flex/R&D buildings with a combined total of 318,000 square-foot broke ground in February at Pompano Center of Commerce in Pompano Beach with completion dates to be disclosed.

Vacancies remained stable in the market at 3.6% but downward pressure is expected to the market over the upcoming months, with moderate supply and build as needed development attitude. Rents are expected to grow steady by 4.7% throughout 2017 and 3.9% throughout 2018.

Palm Beach

The Palm Beach Industrial market is comprised of 60 million square-foot of inventory ranging in size from the 5.5 million square-foot Central Palm Beach submarket to the 193,707 square-foot Boca Raton West submarket.

The average quoted asking rental rate for available Industrial space was $10.10 per square-foot per year at the end of the second quarter 2017 in the Palm Beach market area. This represented a 0.3% increase in quoted rental rates from the end of the first quarter 2017.

Net absorption for the overall Palm Beach industrial market was positive 251,247 square-foot in the second quarter 2017. That compares to positive 238,483 square-foot in the first quarter 2017 and 489,730 square-foot year-to-date.

Current industrial construction is only one development of 128,400square-foot in the Turnpike Business Park.

Vacancy in the Palm Beach industrial market stands currently at around 3.8% and is expected to remain low, as new developments remain scarce.