Expecting An Eventual Downturn, Industrial Owners Trying To Get Tenants To Renew Early
Miami industrial owners are as confident as ever in "South Florida’s most stable asset class," but are making preparations for the party to end regardless, according to a recent Colliers International report.
The brokerage held its 12th Annual Industrial Owner's Forum Jan. 31 in Miami, where more than 70 owners of industrial product got together and talked shop. A post-event report last week outlined some takeaways from that meeting of the minds.
Colliers polled attendees, who said they did not foresee an oversupply of inventory over the next 24 months, predicted cap rates settling at 4.5% or lower this year, and believe their firms will be buying more industrial assets over the next 12 months.
Colliers Executive Vice President Steven Wasserman told Bisnow via email that activity has been robust — he's been amazed at "Bridge [Development Partners’] insatiable appetite to buy land."
Two feared words were indeed uttered: "eventual" and "downturn." Owners said that while land scarcity and availability of capital make South Florida a perpetually resilient market, a correction could be in the near future. To prepare, "owners are approaching tenants to early renew," Wasserman said.
New product will hit the market in 2020, including Codina's new project in Hialeah, Flagler’s 500 acres, and buildings by East Group, Bridge, Liberty and Duke, Wasserman said.
"Demand for an extra 50M SF of industrial space is needed over the next 5 years based on forecasted population growth and historical absorption per capita in South Florida," the report said.