Airport Landlords Have a Leg Up
In the MIA industrial market, landlords rule. State Street Realty prez George Pino tells us the pendulum has swung back to a landlord's market. (Yet another way industrial real estate is like Game of Thrones.)
Class-A industrial space under 50k SF in the Miami Airport submarket is extremely tight, George says--vacancies are about 2% (you'd need to rub some butter or oil on your forklift just to shimmy it in there), giving any landlord with remaining space the upper hand. Demand is high, too. Over the last month, State Street has brought the 350k SF Prologis International Corporate Park, which it reps, to 100% occupancy with the closing of over 100k SF in deals. Limited supply and light spec development will likely lead to a continuation of rental growth through 2014.
On the office side, while vacancy has decreased markedly for Class-A space in Airport West, it's definitely not yet a landlords' market, Hogan Group VP Steve Smith tells us. (It's a renters' world... we're all just leasing in it.) "But we're reducing concessions such as free rent and the amount of the TI allowance," he says, adding that vacancy would have to come down in to the single digits in both Airport West and Coral Gables to see rental rate increases.
Recently, Steve repped TIAA-CREF, owner of 5201 Waterford in the Waterford At Blue Lagoon office park near MIA, in a 9,000 SF lease with Airbus Americas. The space will support sales operations for the aviation company and brings the building to 93% leased. (But you know the old saying that we just made up, "The last 7% is the sweetest.") It follows recent renewals with Ricoh Americas, TW Telecom, and others. JLL's Catarina Jimenez repped Airbus Americas in the deal.