Is there a Miami warehouse construction “boom” as the Miami Herald reports?! Are we in an “industrial real estate revolution” as The Real Deal – South Florida Real Estate News states?!
Ed Redlich, ComReal’s Miami industrial real estate expert, joins Peter de la Torre on his radio show on 880 AM. Listen to them discuss the new warehouse construction in Miami as well as the recent article in the Miami Herald. Redlich challenges the words “boom” and “revolution” by delivering a realistic market perspective.
Click the Biz 880 AM above to listen to a segment of the show and/or click this link to read more on ComReal’s Mid-Year 2012 Market Report on Miami Industrial Real Estate. >>>
Miami-Dade County experienced another very strong quarter increasing the total positive absorption of warehouse space to over 1,000,000 sq. ft. at the mid-year mark. The vacancy rate is now 7.1% which is down from 7.5% in the past quarter. The average lease rates have increased slightly to $7.42 psf. There are six warehouse buildings totaling nearly one million square feet now under construction in the Airport West Dade and Medley sub-markets. All of these developers are constructing on a speculative basis only. In addition, Flagler Development may soon break ground on it’s first building at South Florida Logistics Center next to Miami International Airport. So the question now is, when the new space is delivered, will the vacancy rate increase or will warehouse users keep absorbing more space causing the vacancy rate to decrease even further?
It is possible that an additional 1,000,000 sq. ft. of warehouse space might be absorbed by the end of the year since there are dozens of companies still actively looking to lease or purchase additional warehouse space. So, if you are involved with the Miami industrial real estate market in some manner, then there are good reasons to be optimistic. In addition to warehouse buildings filling up, manufacturing is picking up in Florida while the unemployment rate is going down. Despite the typically-slow summer season combined with a presidential election year, most indicators point to a strong, vibrant market for the remainder of 2012.
The largest industrial transaction of the 2nd quarter was Prudential Real Estate’s acquisition of three warehouses in International Corporate Park in Doral. The class A buildings totaled about 340,000 sq. ft. in size. The seller was Prologis. The total sales price was $46,600,000 or about $137 psf. The properties were 100% fully occupied; the main tenant is B/E Aerospace.
If you would like to read more about the prior three months, please read ComReal’s Miami Industrial Real Estate Market Report for the 1st Quarter, 2012. >>>
Here is an article by the Miami Today News including a recent interview with Ed Redlich in regards to industrial warehouse construction in Miami-Dade. >>>
This is a MUST watch video filmed by Travel Channel during the construction of the Port Miami Tunnel. >>>
For a partial list of warehouses in Airport West Dade over 20,000 sq. ft. that were sold or leased, please see below.
Miami Warehouses Leased:
|Tenant Name||Property Address||Size Sq. Ft.|
|Intcomex||3505 NW 107 Avenue||173,000|
|American Fine Foods||6905 NW 25 Street||146,000|
|Agility Logistics||11010 NW 30 Street||93,000|
|3PD, Inc.||12650 NW 25 Street||79,000|
|SYNNEX||12650 NW 25 Street||60,000|
|Cargo Logistics||1701 NW 87 Avenue||57,000|
|Horizon Plywood||9710 NW 110 Avenue||44,000|
|Gaming Logistics||2610 NW 89 Court||31,000|
Miami Warehouses Sold:
|Buyer||Property Address||Size Sq. Ft.||Sales Price||$ PSF|
|Prudential||9825 NW 17 Street||340,000||$46,600,000||$137|
|Controller USA||8461 NW 61 Street||59,000||$2,100,000||$35|
|DCT Industrial||11400 NW 34 Street||50,000||$4,300,000||$86|
|Tairo||8100 NW 29 Street||46,000||$3,600,000||$78|
|Prologis||11200 NW 138 Street||40,600||$2,842,000||$70|
|NCM Real Estate||8125 NW 64 Street||22,000||$1,680,000||$78|
Graph for Sales Prices of Industrial Properties in South Florida:
In our last report, we noted that the available inventory of good, functional properties has been decreasing. This quarter, it appears that the trend for sales prices is now moving upward. This would suggest that now is a good time to purchase a warehouse before prices increase further and before the good, functional warehouses are purchased by someone else other than you. Also keep in mind that interest rates are relatively low giving buyers more purchasing power.
New Listings on the Market:
Customer Seeks +/- 100,000 sq. ft. Warehouse to Purchase:
We have a customer that seeks to purchase a warehouse for their own use. For the past few months, we have previewed every property that is now listed on the market with a co-operating real estate broker. We are seeking your help in identifying a property that is available on an off-the-market basis. Below is the requirement:
- Total Size: from 75,000 to 125,000 sq. ft.
- Loading: Dock level.
- Class: A or B only.
- Use: Distribution and Warehouse Storage.
- Location: Miami Airport West Dade Sub-Market.
- Closing: 2012-2013.
Please contact Ed, Chris or Edison of the Miami Warehouse Team at 786-433-2380 anytime. All discussions will be kept completely confidential. If your property is already listed with a broker, then there is no need to contact us since we are already aware. Thank you very much.
Service Provider of the Quarter:
Please visit our friends and clients, W. E. Johnson Equipment Company, for all of your needs for forklifts, boat lifts, transporters, lift trucks, compressors, gantry cranes, excavators, hoists, tractors and much more construction equipment.
Another half-million square feet of warehouse space was positively absorbed just over the past three months causing lease rates to slightly increase while the vacancy rate decreased to 7.5%. By comparison, the national vacancy rate is still roughly two percentage points higher at 9.3%. In our opinion, half of the properties that are available are either overpriced and/or have functional issues. Another concern of ours is that we are noticing that there are fewer, good functional properties coming available on the market for sale or lease (see Graph below). The musical chairs game is coming to an end; more companies are settling in. It is not uncommon for tenants to sign five and ten years lease terms with both new deals and renewals. Some prospective buyers and tenants continue to wait on the side lines for the perfect property to come available either on-the-market or off-the-market. Good brokers work their networks seeking future availabilities and “pocket listings” for their prospective buyers.
The biggest news of the quarter was AEW Capital Management’s acquisition of Flagler Station Business Park in Medley for $340,000,000. The property consists of 4,200,000 sq. ft. of class A and B warehouse, office and retail spaces. The seller was FDG Flagler Station. Several warehouses in Americas Gateway Park were also sold to TA Associates Realty; the seller was RREEF. The portfolio consisted of about 252,000 sq. ft. for a sales price of $19,100,000 (or $75 psf). The other large sales transaction was Seagis’ acquisition of the UPS Warehouse, at 10000 NW 25th Street, in Doral. The 340,000 sq. ft. warehouse sold for $26,500,000 or about $78 psf. United Parcel Service sold the property since their logistics operations was downsized. The entire property is now available for lease.
In case you missed it, here is more worthwhile reading of ComReal’s Miami Industrial Real Estate Market Report for Year End 2011 >>>
For a partial list of warehouses in Airport West Dade that were sold or leased, please see below.
Miami Warehouses Leased:
|Tenant Name||Size in Sq. Ft.||Property Address|
|Miami Intl Freight||190,000||14100 NW 60 Avenue|
|Impex||78,000||7850 NW 80 Street|
|Sunshine Bouquet||45,000||2011 NW 70 Avenue|
|AeroTurbine||80,000||1401 NW 78 Avenue|
|Agro-Trade||140,000||11401 NW 134 Street|
|LaDove||40,000||5800 Miami Lakes Drive|
|Alexos||37,500||9710 NW 110 Avenue|
|Trans-Trade||21,500||10505 NW 112 Avenue|
Miami Warehouses Sold:
|Property Address||Size in Sq. Ft.||Sales Price||$ PSF||Buyer|
|11305 NW 128 Street||77,198||$5,000,000||$65.00||Seagis|
|Americas Gateway Park||252,491||$19,100,000||$75||TA Associates Realty|
|10000 NW 25 Street||340,000||$26,550,000||$78||Seagis|
|11200 NW 138 Street||40,600||$2,842,000||$70||Prologis|
|6300 NW 84 Avenue||26,210||$1,890,000||$72||New Doral Investment Corp|
|9880 NW 25 Street||93,819||$8,500,000||$90||9880 NW 25th ST Holding|
|2851 NW 107 Avenue||32,231||$3,750,000||$116||2851 Invest LLC|
Graph for Available Industrial Properties in South Florida:
Notice that in this graph the index has fallen by about 10% over the past couple of years for industrial properties that are available for sale in South Florida. Good real estate is getting hard to find and more expensive.
Back on the Market!
The ComReal Miami Warehouse Team is excited to place this eight acres parcel back on the market. For more details, please read more about this property and other news on Miami industrial land for sale >>>
Industrial real estate expert, Chris Spear, comments on what he is witnessing in regards to Real Estate Investment Trusts (REIT’s) now purchasing smaller warehouses. Read more at Real Estate Investment Trusts Acquire Smaller Warehouses >>>
Client Seeks Warehouse Space and Land to Lease:
- Warehouse: 25,000 to 40,000 sq. ft.
- Loading: street level preferred.
- Land: minimum of 2 to 3 Acres, parking for 150 cars.
- Use: parking and maintenance of fleet cars.
- Location: Central to North Miami Dade; preferred close to Palmetto Expressway.
- Occupancy: 4th quarter of 2012.
- National, Credit Tenant.
Service Provider of the Quarter:
We are pleased to introduce our newest strategic partner, Mr. Alex Ruiz, of Exclusive Brand Marketing. Please learn more about our service provider of the quarter at Exclusive Brand Marketing >>>