In the fourth quarter of 2018, Miami’s industrial market absorbed nearly 1.2 million square feet of space–the strongest single-quarter performance in four years. This achievement comes on the wave of several years of stellar industrial vacancy rates, which have been below 5% since 2015.
“It’s been a crazy couple years,” CBRE Senior Vice President Larry Genet told Bisnow. Genet believes the industrial sector is still in its infancy, in large part due to the potential of e-commerce. E-commerce currently accounts for 10% of all retail sales in the U.S. If that number climbs to 20 or even 30 percent, the potential for demand could increase by tens of millions of square feet of warehouse space.
With companies like Amazon promising same-day delivery, other retailers are trying to keep pace. And keeping pace takes space: sites need ample parking for delivery vehicles (and potentially, future drone slots), as well as employee facilities. Last year, Miami added nearly 10,000 jobs in logistics alone–more than double that of any previous year.
“There is lots of organic expansion–so people who are in 20K square feet are going to 40, people who are in 40 are going to 60,” said Genet.
The commercial real estate industry is bracing for just such growth: In May, CenterPoint Properties signed a two building, 296K square foot lease at Port Everglades in Hollywood, while the currently under-construction Bridge Point Commerce Center in Miami Gardens will offer more than 2.1 million square feet upon completion. Over in Tamarac, BlackRock has partnered with Butters Construction to build an industrial park on a 22-acre site. The demand for space in South Florida is so high that Don Winkle, Port Miami Head of Business Development, said in an interview that the busy shipping industry has him working with terminal operators to find solutions to congestion and angling for terminal upgrades to handle additional volumes.
As South Florida experts with more than four decades of Commercial Real Estate experience, ComReal is poised to help you and your clients take advantage of this incredible era of growth. Contact us today to find out what we can do for you.