Even though the industrial sector in many parts of the country is one of the healthier components of the CRE ecosystem, some fear signs of softening. Developers in Miami-Dade, however, appear to have no such concerns.
More than 80% of flowers imported to the United States come through Miami. That makes warehhouses with tenants in place a solid investment for property owners looking for a stable source of income.
Although demand for industrial space remains strong, rising interest rates and a looming recession has offered some prospective tenants more room to negotiate. Uncertainty about the overall economy is making credit even more important to landlords, and tenants with strong credit will have increased negotiating power – within reason.
Although IOS is seeing growing demand in line with the broader industrial property boom, it is still a volatile market with demand and rents accelerating faster in upcycles but also performing worse during economic downturns. And one of the reasons IOS tends to suffer disproportionately is the overall weaker tenant profile.