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Miami is to Latin America what the Netherlands is to Europe. Miami has the relationships and trade routes to Latin America, South & Central America and the Caribbean; just like the Netherlands has with the rest of Europe. Last week, I had the opportunity to tour the Netherlands with a small delegation which included representatives from Port Miami, Florida East Coast Railway (FEC) and Miami logistics providers.
Our first meeting was a visit to Schiphol Airport in Amsterdam with the Senior Vice President of Air Cargo. His presentation was both comprehensive and informative. Not only did we learn about air cargo, but we were also given an overview of both the Netherlands and the European Union economies. Schiphol is the 3rd largest cargo airport in Europe. Fokker Logistics Park and Schiphol Logistics Park are located nearby. Schiphol Airport was voted #1 for global connectivity according to DHL. We also learned that the Netherlands is a nation that is more of a service provider than of production. They are the 5th largest exporter and the 7th largest importer in the world. These are two astounding statistics, however it is important to understand that most of the products that pass through the Netherlands are originated from or destined to other countries within Europe. Just as “Miami is the gateway to the Americas”, the “Netherlands is the gateway to Europe.” In fact, the Netherlands has over 170,000,000 consumers within a 300 miles radius. Europe has a total population of over 500 million people. The Netherlands truly has a strategic location in Europe; ideal for logistics (logistiek in Dutch). As we say in the real estate profession: “location, location, location.”
The Netherlands is very similar to Miami because they have more service related (than production) industries such as logistics. We both have the international relationships and trade routes. Interestingly, both business communities take advantage of the use of foreign trade zones (FTZ’s). Schiphol is focused on marketing it’s air cargo services to American manufacturers and distributors. The largest flowers auction in the world is also in Amsterdam; in comparison, Miami International Airport receives over 90% of all fresh flowers that enter into the USA. On a side note, the Netherlands also has water issues as they have to constantly battle sea water pouring inland since they are below sea level; this reminds me of our water issues here in South Florida versus the Everglades.
Our delegation then visited with the following Ministries of the Netherlands: Infrastructure and Environment, Economic Affairs, and Foreign Affairs. Here we learned how the Dutch operate their economy. Private / public partnerships are encouraged and promote co-operation and harmony. A few of the major industries that the Dutch are best known for include: farming (produce, fish and flowers), energy, chemicals, data ports and logistics (logistiek). They are extremely focused on agri-products (both imports and exports).
Did you know this?! The Netherlands is the 3rd largest investor in the USA, according to the Netherlands Consulate in Miami.
The Foreign Trade Agreement (FTA) between the USA and the European Union known as the trans-Atlantic agreement could liberalize trade, reduce tariffs and other penalties which could benefit the people of all countries involved. However, there are many Americans and Europeans that are against free trade which may likely destroy this opportunity. A representative that I chatted with from the US Department of Commerce stated that the free-trading Dutch do have some frustrations with the USA and the rest of the European Union’s anti-liberalism. This is disappointing since both the Netherlands and the USA could have so much to benefit from one another.
Some descriptions that I came up with for the Dutch that seem to best describe them are efficient, forward-thinking, productive, trustworthy and friendly. They are also very tall! The Dutch are very impressive overall and seem to desire win-win relationships in trade.
On a cool day in the 40′s with some refreshingly windy rain, we visited the Port of Rotterdam. It stretches nearly 30 miles along the Maas River! This enormous size is understandable when you then consider it is the largest port that serves over 500 million people in the European Union. Our purpose here was to promote Miami as the “Perishables Gateway of the Americas”. Specifically we hope to serve as the primary entry point for fruits, vegetables, plants, flowers, seafood and meats from Central and South America destined for Europe via Port Miami as a transshipment hub then on to Port of Rotterdam. At this time already, the Netherlands is Port Miami’s 7th largest importer and 12th largest exporter. Visit the Port of Rotterdam at www.portofrotterdam.com.
The Port officials highlighted several important trends. First, there is a growing demand for foods everywhere. Second, there is a global shift in the countries that traditionally produce products versus those that consume them. And finally, there is an increased focus on sustainability, efficiencies and intermodal transport. The Dutch are long term planners. They have a plan that they are in the process of implementing by 2030.
To take advantage of the increase in the transportation of perishables, the Port is constructing a new warehouse known as “Cool Port”. The refrigerated warehouse will be ready in 2015, just in time for the opening of the new Panama Canal which will allow larger ships to travel from Central and South America (countries such as Peru, Argentina and Chile) to the Netherlands via Miami. In reverse, the Netherlands is the world’s 2nd largest exporter of agricultural products.
Port Miami has spent over $2B for improvements such as the Miami Tunnel, deep dredge to 50′, the FEC Rail, cranes, bulkheads, and more. In addition, Miami has been improving our roadways and expressways for transportation. New speculative warehouse construction was about 2M sq. ft. in 2012 with an additional 2M to 4M sq. ft. expected within the next couple of years. I think Miami is being viewed globally as a major logistics city. In fact, Miami may become a “Dutch hub” for logistics (or logistiek). Learn more about Port Miami at www.miamidade.gov/PortMiami.
Personally, this was a very exciting trip for myself. My 10th great grandfather, Gerret van Sweringen, sailed from Holland in 1656 on the ship, Prince Maurice, to New Amstel, Delaware in America. He served as the ship’s “supercargo”; which was the person responsible for both the cargo and passengers. It was somewhat nostalgic to visit Port Rotterdam and to wonder what he may have been thinking when he left from Holland for America so long ago. I bet he would’ve never believed that nearly four hundred years later, one of his descendants would return to Holland; let alone be in nearly the same profession as himself!
Please contact me anytime if you would like to discuss the opportunities between the Netherlands and Miami as well as Miami warehouses for the Dutch from the Netherlands. I would be happy to share with you the presentation on Miami’s warehouse market that I handed out. In addition, please stay tuned to read about part two of our trade mission to the 2013 Fruit Logistica convention in Berlin, Germany. >>>
Dank Je Wel (thank you very much)!!!
In ComReal Miami’s year end report for 2011, we wrote about the “return of the landlords” and about the announcements of speculative construction for several, new warehouse projects. In 2012, the theme was absolutely “breaking ground!” as eight new projects commenced. It was very good to see vertical construction in Miami occur once again. ComReal reports that the total amount of warehouse space that was completed and/or nearly-completed in 2012 was about 2,200,000 sq. ft. In addition, new warehouse buildings are going to be constructed in 2013 in Beacon Lakes, Flagler Station, Miami International Tradeport, Airport North Industrial Park, South Florida Logistics Center and Miami International Logistics Center. This year we can expect to see more new construction, some in-fill developments, some re-developments of existing warehouses plus even some demolitions of older, non-functional buildings.
In comparison to the end of the year in 2011, 2012 ended with slight increases to both the average sales price and lease rate; $64 per sq. ft. and $7.54 per sq. ft. respectively. The vacancy rate dropped from 7.9% to 6.7%. Although the positive absorption was only 2,080,000 sq. ft. (down from 2,508,000 sq. ft.), that is a very good sign considering that we had new warehouse space delivered to the market.
The grand finale of the year, was the late-December closing on 45 acres located at 7500 NW 82nd Place in Medley by L&B Realty Advisors. The price was $45,000,000 or about $11.75 per sq. ft. plus the cost of the additional site work that will be needed. Butters Construction & Development will be constructing over 900,000 sq. ft. of warehouse space for what is now being branded as Airport North Industrial Park.
Miami continues to be one of the most dynamic markets in the entire country. No city in the USA may benefit more than Miami from the Foreign Trade Agreements (FTA’s) and Foreign Trade Zones (FTZ’s) thanks in part to the U.S. Department of Commerce. The federal, state and local investments to our infrastructure and transportation systems will secure the foundation for developing our overall industrial real estate market.
On a side note, our team appreciates all of your support this past year. We look forward to working with you in 2013 and beyond. Like many of you, the past few years have been challenging for our team, our staff and our families. However, with your support and patronage, we were able to re-build ourselves to help serve you better than ever. Looking back, the work was never easy, but we always did business the right way. We would not have it any other way. Thank you very much.
In case you missed our prior report, you may click this link for ComReal’s Miami Industrial Real Estate Market Report for the 3rd Quarter, 2012. >>>
New Construction Report:
The ComReal Miami Industrial Team is pleased to present this report on new construction of industrial warehouses in Miami. At the time of this report, there was over 1,000,000 sq. ft. of newly-completed and/or nearly-completed warehouse buildings in 2012. For our brief summary of the report, please visit New Industrial Warehouse Construction in Miami. >>>
Miami International Commerce Center – 8000 Flex Space Building:
ComReal Miami is pleased to announce their representation of PS Business Parks for the lease of their 45,000 sq. flex space in Doral. The Doral flex space building is comprised of both office and warehouse space that is divisible from about 7,500 sq. ft. and up. The property is located at 8000 NW 25th Street in Miami International Commerce Center (MICC) in Doral, Florida.Visit the property website at www.FlexSpaceMiami.com >>>
Miami International Logistics Center:
ComReal is pleased to announce the pending construction of a new class A warehouse named Miami International Logistics Center. The class A, bulk-sized 400,000 sq. ft. building will be one of the closest warehouses to Port Miami and Miami International Airport. The twenty acre site is located just off the Airport Expressway (State Road 112) which is less than twenty minutes from the port and airport. The completion date of this nearly $40M project is expected by May 2014. If having a warehouse near Port Miami is important for your Miami drayage operations then this is the property for you. Please visit Miami International Logistics Center. >>>
Miami Commercial Real Estate Event(s):
Join the the Miami-Dade District of the Certified Commercial Investment Members (CCIM) for their annual Outlook Conference. Expect 300 commercial real estate professionals in attendance. Ed Redlich, CCIM, SIOR will be presenting the Industrial Report. For more details and/or to RSVP visit: CCIM Miami Commercial Real Estate 2013 Outlook Conference. >>>
South Florida Distribution Warehouse Sold:
Congratulations to Ronald “the Silver Fox” Winokur of The ComReal Companies for the successful closing of this South Florida warehouse formerly known as Carl’s Furniture. The sales price was $12,700,000 making it one of the largest sales for 2012. The mixed use building totals over 400,000 sq. ft. Read more about the transaction at South Florida Warehouse. >>>
Miami Warehouses Leased in 4th Quarter 2012 (partial list):
|Tenant||Size SF||Property Address|
|Pacific Services & Trading||35,160||12200 NW 25 Street|
|University of Miami||70,500||6891 NW 74 Street|
|Towne Air Freight||67,000||1530 NW 98 Court|
|TM Telecom||32,000||10205 NW 19 Street|
Miami Warehouses Sold in 4th Quarter 2012 (partial list):
|Buyer||Property Address||Size SF||Price||$ PSF|
|Genet Property Group||10510 SW 185 Terrace||220,000||$9,000,000||$41|
|UBS AG||10000 NW 15 Street||209,000||$26,000,000||$124|
|Bristol Aventura LLC||20725 NE 16 Avenue||206,000||$17,260,000||$83|
|Terreno Realty||7600 NW 26 Street||138,000||$12,100,000||$88|
|Exporther Bonded Corp||2323 NW 72 Avenue||82,261||$6,000,000||$73|
|Industrial Income Trust||2750 NW 84 Avenue||70,000||$7,050,000||$100|
|SNJ Real Estate||4601 NW 77 Avenue||54,000||$4,250,000||$80|
|Holem Realty Group||2500 NW 74 Avenue||52,466||$3,000,000||$57|
|Professional Products Group||6990 NW 25 Street||50,000||$4,160,000||$83|
|STB Properties LLC||8900 NW 33 Street||49,708||$5,050,000||$101|
|Ring Power Coporation||3400 NW 77 Court||46,059||$3,447,000||$74|
|WK Cargo||8020 NW 60 Street||35,000||$1,250,000||$35|
|Contreras y Compania||2685 NW 105 Avenue||15,000||$1,630,000||$108|
Service Provider of the Quarter:
If you are considering a financial consultant, we recommend consulting with Mr. Eric Garcia of Popular Investments in Miami. Eric can assist you by making educated choices. There are voluminous stocks, bonds and other investments to select from; each with various degrees of rewards versus risks. Both new and seasoned investors should consider retaining their own financial adviser. Popular Investments will serve your needs and help make you achieve the financial success you deserve. For more info, please contact Eric J. Garcia at 305-335-5333.