Industrial Space Tightens In Miami Lease Rates Rise
By Marilyn Bowden
Trade with Latin America and an influx of telecommunications and dot-com companies are proving a bonanza for the industrial market in Miami-Dade, according to mid-year reports.
The two forces are driving vacancy levels down to single digits in most areas of the county while the scarcity of space is inflating rental rates.
"Miami-Dade’s industrial sector continued into the year 2000 with the same incredible momentum it experienced in 1999," says Market Beat Update, a quarterly publication of Cushman & Wakefield’s research services. "It has continued to outperform all other counties in leasing and sales activity with a little over 6.3 million square feet of recorded transactions as of mid-year."
The county has 32.3 million square feet of investment-grade space, says Trammell Crow’s Market Scope South Florida Mid-Year 2000, with nearly 667,000 square feet under construction and another 12.6 million proposed.
"This market has grown at staggering rates over the last decade," this report notes, "largely due to Miami’s proximity to Latin America and the Caribbean, which enabled it to become a gateway city and hub for international trade."
Mid-year vacancies across the county hover around 7%, both reports show, with the average gross rental rate about $6.90 a square foot.
Cushman & Wakefield’s breakdown by property types shows 83% of available industrial space is warehousing, 12% manufacturing and 5% office.
A new category rapidly gaining ground, particularly in Airport West, is space custom-designed for high-tech industries.
"This new technology industry is making its presence known primarily at Beacon TradePort and Beacon Centre," says Cushman & Wakefield’s report. LightSpeed Infrastructure’s LightSpeed Center at Beacon TradePort and Doral Commerce Park are examples of new development built solely to suit this industry, it notes.
Demand was highest, Trammell Crow researchers say, in buildings in business parks, with rear-loading capacity, high ceiling clearance and abundant parking.
The inevitable result, Cushman & Wakefield’s report says, is that lease rates in Airport West already the highest in the county at an average of $7.09 a square foot are being driven upwards.
"While typical warehouse space ranges in the area of $6.35 a square foot," Market Beat Update says, "telecommunications space draws from $10 a square foot upwards to $20 a square foot."
The Miami Lakes-Hialeah market, second largest in the county, shows the lowest vacancy at 2.48%, according to Market Scope.
Medley, the third largest, "has captured the attention of large national tenants seeking to expand, relocate or establish a new Miami base to serve the South American export market," Trammell Crow says.
Two reasons for this, it speculates, are the existence of a bilingual workforce and sizable industrial land sites available.
The availability of land and correspondingly low lease rates an average of $5.18 a square foot for manufacturing space, ranging to $12.15 for office-service flex space makes Medley the chief competitor to Airport West, Cushman & Wakefield’s report says.
Another market showing impressive leasing and sales activity this year, says Market Beat Update, is North Central Dade a total of 1.3 million square feet.
The area, which surrounds Opa-locka Airport, has 18,750 square feet under construction. But the 178-acre Renaissance Park, a class-A, master-planned business park now in the planning stages, could raise inventories there considerably.
Another area likely to benefit from telecommunications and high-tech activity, says Cushman & Wakefield, is Homestead.
"About 95 miles of fiber-optic cable will be installed there this fall to make the city high-tech ready for business and economic development," Market Beat reports.
As these industries continue to thrive, the report concludes, it will change the nature and face of warehousing.