Big Space Users Chase Big Industrial Deals
Last week we reported that space is tight for industrial users under 50k SF. (We're gonna have to start sharing forklifts and bathrooms.) Avison Young principal Wayne Schuchts tells us about the market for larger industrial spaces both in Miami-Dade and Broward, which isn't as tight.
1) Close to equilibrium.
A number of Miami-Dade spec industrial buildings are going up, with more on the drawing board (next to some doodles and a grocery list), but even so demand is strong enough to keep the market for large industrial space (100k-plus SF) roughly in equilibrium, Wayne says. In both Miami-Dade and Broward, there are seven or eight quality tenants looking for jumbo-sized deals. Broward is softer than Miami-Dade, but even so there's space to accommodate the demand. Above: Wayne with colleagues Jonathan Satter, Greg Martin, and Gary Gottlieb at the firm's Fourth Annual Charity Tennis Tournament last week in Tampa.
2) Tenants gravitate to quality.
Additions to the supply might disrupt things in the near future, but demand's likely to catch up before long, Wayne says. As newer properties come on line, tenants will be drawn to them, looking for quality features, which usually means 30-foot ceilings instead of 24 (don't lose a balloon in there, though), column spacing, and a greater depth. Older properties in some submarkets might have a tougher time of it for a while, but in the longer run, a vast supply expansion in South Florida is unlikely, Wayne explains, simply because there isn't that much available land.
3) Users want to be owners.
Most of the companies looking for large blocks are domestic users who're already in South Florida, looking for some kind of consolidation. Also, a good many other users (and not just the larger users) are seriously considering becoming owners, Wayne says. Recently he was involved in the sale of the 60k SF Quipp ITW Building Palmetto Lakes to its occupant. Low interest rates are encouraging users to buy, along with the sense that South Florida's a good place to invest their capital.