<< Click for larger view of Miami Industrial Real Estate Graph>>

Welcome to 2011. In these times of uncertainty, you may always rely on the fact that ComReal’s quarterly reports for the Miami industrial real estate market are both a valuable resource for your business and always refreshingly candid. Enclosed you will find specific examples, backup data and our professional opinion of trends in the market. We start off by stating two of the more significant statistics for 2010 overall. First, the vacancy fell by about two points to about 9%. Secondly, the overall activity for both leasing and sales increased significantly from the prior two years. If these trends continue into 2011, we will likely see lease rates and purchase prices stabilize; perhaps even increase. However, much depends on our national economy and the international trade industry which affects Miami so dramatically.

Of all of the real estate property types in Miami, the industrial category seems to be the most active. However, for buyers and tenants, the best deals may be behind us. The “early majority” of end-users that recently acquired industrial real estate took advantage of the lower pricing and terms for the best properties. The “late majority” of end-users to come along in 2011 may expect higher pricing, higher interest rates and fewer good, functional properties to choose from.

If you are an end-user such as a manufacture or distribution company, there is an important trend that you ought to be aware of which we describe as the “Walmart-ization” of Miami’s warehouse market. What this means to you is that most of the larger warehouse properties are aggressively being acquired by institutional investment firms such as REIT’s. Only about 10% of warehouses in Miami are owner-occupied. If a good opportunity to buy a free-standing warehouse building comes along, you’d better buy it or you may not find another! Del Valle Brands Distribution timed the market perfectly in December by acquiring a 127,000 sq. ft. warehouse. At a purchase price of $7,650,000 (or $60 psf), this was the largest transaction by an owner-user in all of 2010. ComReal Miami was the only broker in the transaction and successfully created a win-win for both the buyer and seller.  << Read more here >>

Below is a list of Miami warehouse buildings sold in the sub-markets of Airport West Dade and Medley:

Address                                 Closed Date:     Sale Price            $ PSF        Size in Sq. Ft.
6400 NW 72 Avenue        January              $4,340,000              $115          37,562
11380 NW 34 Street         January             $6,700,000              $73           90,973
11401 NW 134 Street       January             $15,200,000            $57           268,000
11450 NW 34 Street         February           $2,500,000               $118        21,084
2900 NW 77 Court            February          $3,300,000               $86           38,042
8925 NW 26 Street           February          $2,000,000              $93            21,384
8150 NW 64 Street           March                $2,500,000             $48            52,000
8570 NW 68 Street          March                $1,800,000              $85            21,000
9955 NW 58 Street           March                $1,950,000             $113           17,203
1550 NW 96 Avenue        March                $1,810,000              $88            20,436
2250 NW 114 Avenue      March                $3,950,000              $135          29,257
7005 NW 46 Street          April                  $1,300,000              $69            18,944
1740 NW 69 Avenue        April                  $1,000,000              $23            43,168
7970 NW 56 Street          April                  $1,480,000              $52            28,224
8221 NW 54 Street          June                   $2,100,000             $50            41,581
3655 NW 115 Avenue      August              $3,661,000              $102          35,720
5460 NW 78 Avenue       July                     $710,000                $56           12,517
7301 NW 77 Street         August               $1,000,000             $61            16,284
7939 NW 84 Street         August              $67,000,000             $75           882,895
1850 NW 94 Avenue      September         $1,420,000               $89           15,856
7000 NW 33 Terrace      December           $7,650,000              $60           127,010
6990 NW 25 Street        December           $3,640,000              $70           52,000

Another significant statistic is that there is almost zero warehouse space under construction which will help increase the occupancy levels of existing warehouse. The best deal for industrial real estate right now is vacant land. This is because nobody else is buying it. The drawback is that lenders are very reluctant to finance, so your best bet is owner financing or pay all cash. Prices for vacant land are about half-off from peak levels in 2007. Within six months you may expect an announcement of a major, new construction project and by the year’s end a significant ground-breaking. There does appear to be a renewed sense of optimism as we commence this year. Some of this is credited to Governor Rick Scott’s “Florida is open for business” campaign and the Port of Miami’s three projects: the 50’ dredge, the FEC railroad and the tunnel.

Miami Logistics Business and Warehouse Sold!

Michael Weihl of ComBiz Miami in cooperation with the ComReal Miami Warehouse team successfully brokered the disposition of a Miami logistics business opportunity and warehouse space. The total transaction was valued at more than $4,000,000, involved six different companies and over 200,000 square feet of Miami warehouse space. << Read more here >>

Miami Cooler Warehouse Available

This Miami warehouse is complete with coolers making this an ideal refrigerated distribution center for perishables.  The total size of the space is 53,000 square feet including 11,000 sq. ft. of office space and 42,000 sq. ft. of warehouse space. The property is located at 2011 Northwest 70th Avenue in the Miami industrial real estate market located near Miami International Airport. According to MIA air cargo statistics: over 70% of perishables, 86% of flowers and 70% of fruits & vegetables are imported into the United States via MIA. Learn more by clicking here: Miami’s Air Cargo.

The refrigerated warehouse in Miami is now available for sub-lease for an asking rate of $8.50 per square foot, on an industrial gross basis. It was previously occupied by Dole Flowers, Sunburst Farms and Trans World Forwarding. The neighbors include Armellini Express, Mayrshon International, Flying Foods, Gate Gourmet and more. The warehouse space has ten dock height loading doors; 19′ clear ceilings and is fully sprinklered. This warehouse is ideal for the distribution of perishables, flowers, foods, beverages and produce.

For more information about this Miami cooler warehouse space and others, please contact The Miami Warehouse Team at 786-433-2380 and/or visit www.MiamiCoolerWarehouse.com

Sgt. Dan Berkovitz recruited to the Miami Warehouse Team.

Dan Berkovitz was born in Israel to an Israeli mother and Romanian-born father. After high-school, Dan joined the Marine Corps and served 4 years in supply/logistics within an artillery battalion. Dan was awarded the Navy Achievement Medal for superior performance of duty during his second tour overseas during Operation Iraqi Freedom by decongesting a heavily congested supply-chain system. This exemplifies Sergeant Berkovitz’s logistical knowledge, his tenacity to get the job done, and his leadership experience.

After the Marines, Dan Berkovitz went to college at Florida International University and graduated in 2010 with a Bachelor of Business Administration with a concentration in management. Dan has been the President of the Florida International University (FIU) Real Estate Student Association (RESA). He is now President of the Real Estate Alumni & Affinity Council for the FIU Alumni Association and School of Business alumni (2010) and member for the Greater Miami Jewish Federation Real Estate committee.

Industrial Real Estate Events

January 2011
Ed Redlich, Edison Vasquez and Dan Berkovitz attended the CCIM Miami Commercial Real Estate Outlook Conference. Visit www.MiamiCCIM.com.
January 2011
The Miami Warehouse Team and Michael Weihl attended the Commercial & Industrial Association of South Florida (CIASF) 2011 Industrial Market Report for Miami-Dade County. << Click here for the entire report >>

For the past several years, I have had the honor of working with Mr. Michael Weihl. He joined The ComReal Companies because of its highest reputation within South Florida’s commercial real estate industry for over 30 years. Mr. Weihl and his team brings to us the same set of high ethical standards to the Miami businesses brokerage profession.ComReal is now also a leading intermediary of transaction services for the small and mid-sized business owner in South Florida.

Together we have formed a synergy amongst the commercial property and business specialists. Our customers are really beginning to value the duo-brokerage firm that ComReal has become and we are able to offer them expertise from two perspectives. Recently, a Canadian logistics firm decided to expand in the Miami market. They retained ComReal’s Industrial Real Estate Division to locate and acquire a warehouse space in Miami for lease. I met with the CEO and CFO here in Miami to discuss their business plan about logistics within Miami, Canada, Central and South America. After discussing and touring the Miami warehouse markert, it was determined that it was in their best interests to acquire an existing logistics company already in operation in Miami. This is where Mr. Weihl came into the consultation process. After learning more about their platform and requirements, he put together a campaign to acquire a Miami logistics business.

Presently, Mr. Weihl has several business opportunities for acquisition in the following industries: logistics, manufacturing, import, export, distribution and more. He also has several businesses looking for mergers and acquisitions in the Miami, South Florida area and beyond.

Please contact Michael Weihl, Business Broker & Specialist, of ComReal Miami, Inc. at 786-433-2503 or visit his website at www.MichaelWeihl.com. All discussions and consultations will be kept completely confidential.

October 29th to 31st – Edward Redlich, SIOR of Miami took the opportunity to attend the SIOR World Conference in Toronto, Ontario in Canada. Over 600 industrial and office real estate professionals attended the event. Mostly were real estate brokers, but also included developers, investors, institutions, lenders, architects, engineers, and more. The commercial real estate convention was held at the  Fairmont York Hotel. Personally, I am very pleased that this year’s convention was held in a city outside the United States; especially Toronto. It is an awesome city and I now have several Canadian customers including a flower distributor, logistics company and a stone importer/distributor. Toronto has over 8oo,ooo square feet of warehouse space. It is a primary logistics and distribution center for North America and has self-proclaimed itself as “Toronto: Gateway to North America and the Globe”. As such, there is plenty of access to rail lines, airport cargo, sea port and highways. Nearly 50% of the US population is within a day’s drive. Over 80 airlines operate at Pearson International Airport with over 80 international destinations. The population is about 5.5 million. Toronto reminds me of Chicago with it’s industrial warehouse market, city’s architecture, culture, international community, and more. However, it seems much safe, cleaner and the people are friendly. Next year’s convention will be held in Orlando, Florida. I’d like to see a SIOR convention held in Mexico in the near future.

Here is a brief summary of the highlights of the SIOR real estate convention primarily from my industrial real estate perspective. I would like to note that real estate markets around the world and the United States vary greatly of course. However, a common theme amongst the SIOR professionals at the World Conference is that warehouse activity in the USA remains low. Almost every market in the USA had no major activity from the 4th quarter of 2008 through 2nd quarter of 2009. There is hardly any specualtive industrial construction anywhere. The good news is that most industrial real estate markets started seeing activity in the past two quarters and some have reported more frequent transactions; both large and small. Rental and sale values along with occupancy rates are just recently appearing to stablize. SIOR’s are great at communicating with their clients and reading up on market trends. As such, it appears that most SIOR’s are optimistic about the future, however there is anticipation that we will have more economic and political challenges for the next couple years. We are listening to the economists and politicians speak, but are skeptical they will get it right. Our best course is to focus on our business and our customers. And as the theme of this conference states “when the going gets tough, the tough get going”.

“Helping your clients navigate the globe with SIOR”. Before and after this session, I had the opportunity to meet commercial real estate professionals from around the world from countries such as Canada, Ireland, England, Japan, England, Puerto Rico, Venezuela and Mexico. These connections will be of great benefit for myself and my customers. There was some discussion on Miami, Florida’s central role in the international business and real estate market. Miami is viewed as a major gateway into South and Central America and the Caribbean. Miami has the trade routes, businessmen, relationships and language capability for companies to reach Latin America via Miami. Interestingly, most deal flow for business decisions come from the United States; so referrals are going out of the U.S.A. It is much easier to obtain an office specialist than an industrial specialist amongst international real estate brokers. The reason is that there is more commissions in office brokerage hence more office experts. This point really stresses the point why it is important to select SIOR professionals around the world. My theory is that Florida will continue to receive good activity from real estate investors from the United Kingdom, Germany, France, Canada and others. This session of the convention, I learned how to protect my client relationships by being able to offer global services and contacts; understanding international issues like languages, cultures, currencies, time zones, referral standards, etc.; and highlights from other CRE professionals of other countries.

“Distribution and logistics: the client’s perspective”. This session was of value for an array of reasons and also stressed the importance of the broker / customer relationship and experience. Be sure to point  out the value added during the entire relationship.

* The broker must take a leadership role during the process and add value for the client. CRE brokers negotiate purchase contracts and lease agreements everyday. Most often, the clients have not seen these documents in five years when they did their last transaction.

* Broker must work with client to identify the customer’s requirements. Sometimes the customer does not yet know either. However, the broker’s experience in dealing with similar businesses and warehouses will be able to determine such needs and requirements. And most importantly: the broker must ask the customer many, specific questions. An experienced, SIOR broker always asks the best questions which help the customer and add-value to the relationship. Often the broker will speak with executives such as VP of operations, CFO, human resources and any other employee that is integral to customer’s business.

* New tools, technologies and innovative processes must be adopted by CRE brokers which add both value and time-savers for clients.

*  CRE Tip #1 for customers: Engage a CRE broker now. All too often, clients look for real estate and/or renegotiate a lease way too late. Do not wait right up until a lease expires or you obtain a new contract for business with a customer which will require new or more warehouse space. It is never too early to contact a CRE broker for a candid discussion on market trends, forecasts and availability.

* CRE Tip#2 for customers: Contact your local CRE broker for service providers such as a warehouse roofer or architect. Brokers have a database of all types of contractors and professionals because good ones are needed so often. So they will come well recommended and have been used before with good results.

At the end of this session, The Port of Prince Rupert in Canada was discussed (see www.rupertport.com). It actually is more direct and takes less time for Asian ports to ship freight via Prince Rupert than via the Panama Canal. In addition, some in the distribution and logistics businesses try to avoid Los Angeles, California due to the disruptive strikes by unions and longshoremen. However, Prince Rupert does experience unpredictable land slides and Panama Canal has the problems of bad weather and hurricanes that can be supply chain disruptions.

“SIOR keynote speaker: Marci Rossell, PhD.” One of my favorite parts about attending CRE conventions is learning what the economists have to say. There is too much to write, so I’ll just mention the most important part of what I took away from this. Ms. Rossell affirms my theory that the sector of the economy that will pull America through 2010 to 2012 during this bad economy is: exports! I strongly believe this to be true. The reason is that people from around the world are gaining higher disposable incomes. Just look at the increasing economies and standards of living for the BRIC countries (Brazil, Russia, India and China); plus all of the other nations. In addition, the United States of America still has a profound reputation for manufacturing high quality products; coming up with innovative ideas; being economically and politically stable; and being trustworthy and dependable business partners during the trading process. For these reasons, Americans will see exports grow significantly in the next few years. The lower US dollar value will help increase export sales too. It is so imperative for our economic and political leaders to execute the foreign trade agreements with countries like Colombia, Panama, South Korea and more. Countries like China, Iran and Venezuela are aggressively doing business. Why does it seem the USA government is apathetic to foreign trade and exports? Anyway, for those in the Miami, Florida industrial real estate market “more exports, means more warehouse space”. The ComReal Miami team is looking forward to serving our warehouse customers in the manufacturing and exporting industries during the next several years.

SIOR Real Estate Conference

For more information on SIOR and commercial, industrial real estate trends and data, please contact Edward J. Redich, SIOR, CCIM of The ComReal Companies based in Miami, Florida, USA. Phone: 786-433-2379 or www.comreal.com.