“The average price per square foot and total sales volume are two better markers than the average sale price,” said Juncadella, of the health of the industrial market. “What’s driving the price per square foot higher is institutional investors wanting industrial warehouse space in Miami and users who want to control their own real estate and not be subject to a landlord’s rent increase are driving price per square foot.”
Easton saw more demand than supply in 2019, driven largely by online shopping and the storage space required for goods.
“E-commerce is 18% to 20% of the absorption in the local warehouse market per year. There’s a new e-commerce customer every new year,” said Easton.
Still, the increase in vacancy rates will matter to investors, said Reonomy Market Analyst Omar Eltorai.
“It’s indicative of demand across the market,” Eltorai said. “Looking at it from an investor’s standpoint, you want to know you can fill the property.”
Juncadella said he has seen vacancies rise.
“But the market is absorbing a lot and some, not all, will be filled in 2020 at a rate that we’re comfortable with,” Juncadella said.
“Even with the increase, vacancy rates are in a healthy range,” said Easton. “Vacancy rates are below 5% since 2014, and anything below 5% vacancy is a strong market.”
“When comparing Miami to the other metro areas, including New York, Los Angeles, Chicago, Atlanta, Philadelphia, Phoenix, San Francisco and Minneapolis, it wasn’t performing as strong as N.Y. and L.A,” Eltorai said,
The average sale price rose for three cities: In Los Angeles, from $3.4 million in 2018 to $3.5 million in 2019; in New York, from $2.9 million in 2018 to $3.1 million in 2019; and Minneapolis saw $2.53 million in 2018 and $2.68 million in 2019.
Other cities suffered average sale price losses from 2018 to 2019: Chicago had $2.39 million in 2018, $2 million in 2019; Atlanta had $2.18 million in 2018, $1.91 million in 2019; Philadelphia had $1.8 million in 2018, $1.71 million in 2019; Phoenix had $2 million in 2018, $1.9 million in 2019; San Francisco had $3.64 million in 2018, $3.56 million in 2019.
Source: Miami Herald