The Miami industrial market ends 2018 with a 4.0% vacancy rate and a $10.52 per sq. ft. average (gross) lease rate. There was 3,595,710 sq. ft. of positive absorption for the year; averaging about 1M sq. ft. per quarter is a sign that our market is relatively healthy. There was 4,398,422 sq. ft. of new construction completed giving a total now of 244,481,854 sq. ft. in total inventory. In addition, there is 4,373,255 sq. ft. now under construction.
Overall, Miami remains a seller/landlord’s market. This is a challenge for businesses seeking to expand. Especially for manufacturing and production companies who prefer to own their real estate as well as invest in the property’s infrastructure. The high sale prices per square foot and low cap rates are still turning owners into sellers. Some prospective buyers continue to pay a premium for the right property. Smaller spaces and buildings are in low supply. Economically-priced, class C spaces and short term leases are also hard to find.
In 2019, we have some tips on acquiring industrial properties in this market. 1. Go view available properties expeditiously. You do not have to buy it, but at least go look at it. 2. Have your team ready. Select your real estate attorney, lender and broker (ComReal) so that you are ready to take action. 3. Although presenting offers swiftly is important, a well-thought-out proposal and impressive presentation can help ensure a successful acquisition. Present offers in-person if possible along with a pre-qualification letter and/or strong financial statements. “Get ready to get ready.” as Ron Redlich with ComReal often says.
Missed Our Last Industrial Market Report? If you would like to read last quarter’s report, please view online at: Miami Industrial Real Estate Report for the 3rd Quarter 2018. >>>
News Release: Refrigerated Warehouse Sold for $18.7M!!!
ComReal sells The 18770 Building located at 18770 NE 6th Avenue in Miami for $18,770,000 to 18770 Miami, LLC. The 234,739 sq. ft. building was one of the largest transactions involving a refrigerated warehouse in 2018. Read the full story at Refrigerated Distribution Warehouse in Miami Sold! >>>
Congrats to Coaster Company of America for their 250k SF warehouse space lease renewal within Miramar Park of Commerce!
Featured Property: The Deerwood Office Building for Lease or Sale
The Deerwood Office Building is now available for lease or for sale. The property is located at 14000 SW 119 Avenue in the Deerwood Business Park in Miami. Enterprise Rent-A-Car occupies the 2nd floor and the 11,700 sq. ft. 1st floor is available for lease. This 25,000 sq. ft. office building would be excellent for a tenant or an owner/user investment opportunity! It is within a corporate park setting in South Miami-Dade just off of the Florida Turnpike. For more information, please contact Patricia Quintana, CCIM at 305-815-3376
Miami Warehouses Sold in 4th Quarter 2018 (partial list):
|Buyer||Size SF||Property Address||Sale Price||$ PSF|
|18770 Miami||234,739||18770 NE 6 Avenue||$18,770,000||$80|
|Duke Realty||208,050||3840 W 104 Street||$34,280,000||$165|
|Flagler Global Logistics||181,947||3200 NW 67 Avenue||$31,120,000||$172|
|Kalorik||122,272||16175 NW 49 Avenue||$12,150,000||$99|
|Elion Partners||62,713||7425 NW 79 Street||$7,600,000||$121|
|HighSheer AC||54,885||3250 NW 107 Avenue||$8,175,000||$149|
* Deals closed by the ComReal Miami Industrial Team
Miami Warehouses Leased in 4th Quarter 2018 (partial list):
|Tenant Name||Size SF||Property Address|
|Coaster Company||250,441||10700 Enterprise Way|
|New Era Cap||84,000||4100 NW 142 Street|
* Deals closed by the ComReal Miami Industrial Team
Our friends with Lennox Industries have expanded their presence at the Kendall Summit building!
Opportunity Zones in Miami by Pat McBride:
You might like to learn more about Opportunity Zones in Miami. Please check out Pat McBride’s report on Opportunity Zones in Miami. >>>
Welcome! Seair Cargo Logistics relocates in Doral thanks to Patricia Quintana, CCIM!
Florida State Sales Tax on Commercial Rent Reduced in 2019!
After heavy lobbying efforts over many years by Florida Realtors and other pro-business groups, the State of Florida has generously reduced the state sales tax on rent by a whopping one-tenth of one percent (.10%). Starting in 2019, the rent tax will be reduced from 5.8% to 5.7% in Florida; from 6.8% to 6.7% in Miami-Dade County.
Upon visiting Tallahassee several times, the State of Florida legislators would tell me that this sales tax on rent does not effect all of the businesses who own and operate within their property (i.e. owner-users). In reality, this is mostly NOT true! Because very often the real estate property is owned under a different entity than the business operation. This scenario necessitates a lease agreement among the two entities and rent to be paid. In steps the State as this is a taxable transaction. So yes, owner-users do indeed pay sales tax on commercial rent (unless the ownership and business is exactly the same entity).
Florida is the only state in the nation that has such a sales tax on commercial rent. What’s worse is that the state charges the sales tax on top of property taxes. This is double taxation. Not fair! And not legal. The government thinks that we are stupid. Maybe we are. – written by Ed Redlich