By Jose Juncadella – Principal, Fairchild Partners
In the Miami-Dade Industrial market, activity is still phenomenal. We have seen great absorption of space for two consecutive quarters and the growth is steady and promising. In particular, we have seen that activity for smaller-bay warehouses is the best it has been in years.
Foreign companies make up a lot of the activity as companies from Central America and Brazil have established presences in Miami as well as expanded their current operations. An interesting trend is that companies are also beginning to understand how Class A building design will increase their ability to store yet maintain a smaller horizontal footprint. We have seen several companies that have “expanded” into space that is practically the same size as their current facility but offers much more in storage due to height and ability to rack more efficiently.
Space that is called “Functional Class B” in the sense that it is older product in great locations and satisfies the needs of most companies, is staying occupied but rates for larger “chunks” of this Class B space are lowering slightly. All other rates are increasing, with several buildings achieving numbers as high as $10.25+/SF Industrial Gross.
The appetite of Institutional investors is also extremely strong, and there is close to 1MM SF under construction and even more planned for next year. This new product is Class A and is primarily occurring in the Medley/Hialeah submarkets.
All in all, the industrial market is very strong and growing as 2015 has been another great year thus far for South Florida.