ComReal’s Patricia Quintana, CCIM, Presents at 2021 CCIM Outlook Conference

Written by Jacqueline Coleman

January 29, 2021

“The industrial real estate market is on fire!” Says ComReal-Miami-Doral Commercial Advisor, Patricia Quintana, CCIM. On January 12th, Patricia participated as a presenter at the annual 2021 CCIM Outlook Conference held virtually this year. Over the course of her nearly 20-minute presentation to fellow CCIM colleagues, Patricia shared her research and expertise related to the state of industrial real estate at the end of 2020 and how it will evolve over the next year. She reported on the activity at a macro-level nationally, as well as how the South Florida market has fared through the coronavirus pandemic and how it will continue to grow in the coming months.

Here are some important takeaways from her presentation as it pertains to the industrial real estate market.

2021 Industrial Real Estate Outlook

From a high-level, the important takeaway from the last year is that e-commerce will drive demand. Industrial real estate has been the most resilient mainly due to the fact that e-commerce businesses such as Amazon are driving the acquisition of properties as consumers’ shopping habits rely on online e-commerce models. The net absorption is projected to reach 250 million sq. ft. in 2021, spurred by new constriction and strong pre-leasing of speculative projects. In Miami-Dade alone, four of the five top leases over the past year were to Amazon. As online shopping continues to grow, there will be more retail to industrial conversions and adaptive use of retail buildings.

Additionally, inventory control will be a top issue. As we saw throughout the early stages of the coronavirus pandemic, there was a major supply chain disruption with regard to certain household products such as toilet paper. Businesses will focus more on “safety stock” as we move into 2021, ensuring that they have up to 60 days of inventory in order to limit any further supply chain disruptions moving forward.

Markets to Watch

The Southwest and Southeast U.S. will be major markets to watch as they continue to see massive population growth in these areas. When it comes to industrial real estate, the Inland Empire region of the Southwest will continue to see massive growth. More money than ever before will go into industrial real estate as investors seek new opportunities, especially related to e-commerce. New design features and technology will be required in order to maintain fluid functionality and sustainable buildings. As these companies grow, there will also be bigger electrical power requirements and larger building needs such as 40 ft. ceilings.

Miami-Dade Industrial Recap

Miami-Dade ended 2020 with a vacancy rate of five percent, average rent of $12.82/sq. ft, and over 4.3 million sq. ft. under construction. Additionally, the average sale price was $151/ sq. ft. Top markets in Miami with the highest average rent continue to be Airport West (Doral), Airport East, Medley, Miami Lakes, and Hialeah.

As Miami-Dade continues to attract new residents and businesses, the industrial sector will continue to grow in the coming year. Businesses are flocking to states in the Southeast that have lower taxes and a more pro-business government. This will continue to drive demand for industrial real estate in places like Miami-Dade County in 2021.

 

For more information on this presentation or report, please contact Patricia Quintana at pquintana@comreal.com.

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