Three Hot Industrial Trends

Rising rents and a 5% vacancy rate indicate the Miami-Dade industrial market has fully recovered, Flagler Real Estate Services leasing director AJ Rosillo tells us. (We can all go back to worrying about something else.) “There’s tremendous new demand for new space.”

AJ (here with husband Frank) is also head of the Commercial Industrial Association of South Florida, which recently released its annual Miami-Dade industrial market report. The report, compiled by Dixon Commercial Real Estate's Thomas and Andrew Dixon and State Street Realty's Edward Lyden, has the following takeaways:

1) The strongest demand is for space between 10k SF and 30k SF. (Like a good diamond, it doesn't have to be big, but it better be flawless.) To compete in that environment, landlords should reposition larger blocks of vacant second-generation space into smaller bays to target smaller tenants.

2) Unlike previous cycles, manufacturing is on the rise in Miami-Dade. Latin American companies are moving operations here, including food processing and aviation companies. Also, medical drug and equipment manufacturing is active, with some tenants purchasing their own facilities. (Is that a forklift operator or a watch model?)

3) Although the market continues to improve, there’s concern that rental rates and sales prices are reaching a peak. That’s because of an increase in the supply of quality industrial buildings coming online in 2014, and the fact that sales prices of existing buildings aren't supported by rental rates.

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