The growth of e-commerce and demands from a growing population is increasing rental rates for storage space throughout South Florida.
Steven Wasserman, executive VP at Colliers International, said the industrial space market is “booming” thanks to a convergence of market conditions that includes larger companies buying up smaller companies and bored people isolated by the Covid-19 pandemic redecorating their homes.
“The construction services industry is also doing very well,” Wasserman said.
All these factors have increased the demand for warehouse distribution, manufacturing, and flex space, Wasserman said. Some of the recent big industrial space moves include Tamarac-based City Furniture leasing 290,000 square feet of office space at the Bridge Pointe Commerce Center in Miami Gardens. Plus, this past March, Atlanta-headquartered retailer Home Depot (NYSE: HD) opened a 332,000-square-foot delivery center in Hialeah in April. Additionally, Amazon (Nasdaq: AMZN) invested $84.5 million to buy 133 acres in Sunrise to construct a fulfillment center and most recently, there was a proposal to construct around 1.5 million square feet of warehouse space on the race track of Isle Casino Racing Pompano Park.
To accommodate this demand, developers are constructing another 3.2 million square feet of industrial space in Miami-Dade, 1.3 million square feet in Broward, and 227,000 square feet in Palm Beach County, according to commercial reports recently released by Colliers (Nasdaq: CIGI). Additional industrial warehouse space will also be built on the 175-acre Lemon Site in Doral and a chunk of Calder Race Track once those pending real estate deals are completed, Wasserman added.
In the meantime, industrial space in Miami-Dade and Broward counties are becoming more expensive and scarce.
In Miami-Dade County, market forces created a tie for “its all-time record low” for vacancies in the industrial sector, declared Colliers’ Miami-Dade County Industrial Market Report. Additionally, there was a net absorption of 1.4 million square feet of industrial space this third quarter, compared to a net absorption of 527,900 square feet in the year-ago quarter.
Vacancies for industrial spaces in Broward also plummeted to 5.9% in this year’s third quarter compared to the 6.8% vacancy rate in the year-ago quarter.