Doral Gaining During Nation’s Commercial Realty Dip

Doral’s commercial real estate defies national trends and continues to showcase high demand.

“Viewing commercial real estate overall, even on a national scale,” said Matthew Rotolante, president and broker at Lee and Associates South Florida, “I would say Miami, Doral included… is somewhat resilient in the face of some of the trends that are taking place on a national scale.”

Doral has faced and surpassed the test of time as it has evolved over the years and maintained its prominence.

“Originally it evolved more as an industrial land area,” said Mr. Rotolante, “with a lot of warehouses, but what we’ve seen more recently is there’s been a lot of residential buildings and neighborhoods, townhomes, condos, single-family homes that have been built. It’s a great place to live.”

In regard to multifamily, said Mr. Rotolante, new apartments have been built. However, the pandemic impacted office space as many companies opted for employees to work remotely. Due to covid, said Mr. Rotolante, office space has not performed as well on a national scale. Markets that have a lot of office space such as San Francisco and New York have suffered. Despite the change, Doral’s office market has continued to excel. Similarly, other professionals in the field have noticed the impact the suffering in these locations has had on the office market in Doral.

“There’s a lot of out-of-market companies that came to Miami,” said Andrew Easton, vice president of office at Doral-based The Easton Group, “and that’s really what’s helped our office market compared to a lot of the others in the United States. A lot of out-of-market tenants have come to Miami and filled up all our vacancies and then the existing clientele here has continued to grow and flourish.”

New-to-market companies have come from domestic locations such as New York, California and Chicago. Many people, said Mr. Easton, moved their companies and families to South Florida due to covid. Ultimately, the population increase helps drive real estate values and the influx of migration helped South Florida.

“Office demand in Doral is high,” said Mr. Easton. “Buildings in the city are being knocked down, which is creating higher demand for the existing product.”

“On the industrial side, rents have stabilized,” said Mr. Rotolante, “and we’ve seen some negative absorption in the Doral area, maybe about 600,000 square feet or so. What that does is it leads to a rising of the vacancy rate. I think we’re hovering around 5% where we had been as low as 3.8%. So with that in mind, you’re seeing a lot more subleases on the market, which means businesses that had leased property and still have the lease terms left, they’re trying to find tenants to replace themselves on those leases.”

This indicates things have slowed down a little bit, said Mr. Rotolante. However, businesses are still making the decision to lease and are making a profit. There are different types of users for warehouse and office, said Mr. Rotolante. Due to residential increase, there has been a growth in healthcare such as Jackson North coming in and the University of Miami is doing a UHealth center.

Retail, over the past 20 years, has been suffering from E-commerce and online shopping, said Mr. Rotolante. This has benefited warehousing. However, retail vacancies are relatively low right now for the Doral area and South Florida in general.

“We’re really well located for international trade,” said Mr. Rotolante, “we’re really well located for import and export, and you see a lot of that taking place. A lot of the warehouses are based on consumption, so we’re seeing a lot of E-commerce uses. We’re seeing a lot of 3PL, third-party logistics, operators that are basically moving and shipping products for big retailers and other wholesalers. Those are the primary users. Every once in a while, you’ll have a manufacturing operation too, but I would say that predominantly the warehouses are being used by import, export and logistical operations, distribution-oriented businesses.”

Pricing has increased, said Mr. Rotolante. Warehouse has probably increased the most, followed by retail, office and then multifamily rents. Mr. Rotolante said he believes things will stabilize. Covid created almost a shot in the arm for Florida overall, he said. From that standpoint, he said he does not foresee rents dropping too much, but they are stabilizing.

“Doral overall, compared to other markets is doing well, said Mr. Rotolante.” “It’s just grown a lot. The face of it has changed. I’ve been operating there myself going on 15 years, and we’ve just seen it become a very viable place to live. There’s great malls, there’s great retail locations, restaurants, Downtown Doral, City Place; those areas are really premiere retail locations that are consistent with what you might see in Wynwood or Downtown Miami or Coral Gables. It’s a fun place to work and live in addition to just being a warehouse market that it had traditionally been known for prior.”

 

Source: Miami Today