The Miami industrial market ended Q4 2019 with a 4.2% vacancy rate and $12.40 per sq. ft. average (gross) lease rate. There was 1.4 million sq. ft. of positive absorption over the past 12 months, with deliveries totaling 2.7 million sq. ft. in the same time. There is over 4 million sq. ft. of new construction in the works, which is 1.7% relative to inventory and slightly below the national average. The most notable area of supply is the emergence of North Miami Beach, the metro’s second largest submarket. There is currently 1.8 million sq. ft. under development in this submarket, which is more than half of the metro’s total development.
Vacancy rates in Miami have stayed around 4%, but absorption throughout 2019 has been about a quarter percent below last year. Supply has remained strong. From a construction standpoint, the Miami-metro area remains active with 4.4 million sq. ft. in the works across 30 properties, 1.7% relative to inventory, which is slightly below the national average. The industrial products’ shorter construction cycle, compared to other commercial real estate, means that supply can adjust quickly to meet demand in the market. Demand has continued to be strong in the market, the market continues to digest new supply, though certain submarkets such as Miami Airport West are becoming more expensive for prospective tenants as land limitations and the desire to be close to MIA have driven prices up in this submarket, leading prospects to look for developable land in other Miami submarkets.