The Homestead Park of Commerce

We are pleased to announce the sale of 28 acres located within The Homestead Park of Commerce in south Miami-Dade County. The closing price was $10,900,000. (There was also an additional, non-disclosed assignment fee).

The Buyer is EastGroup Properties, Inc. (NYSE: EGP), a S&P Mid-Cap 400 Company who is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis on Florida. The purpose of their acquisition is to construct four class A warehouse buildings for a total of about 400,000 sq. ft. The estimated delivery date is the third quarter of 2023.

The Seller was Doug, LLC who contracted to sell the property to Violet Capital who subsequently assigned the contract to EastGroup. “The Homestead / South Dade submarket will be South Florida’s next hot industrial market as demand for industrial space in Homestead continues to increase. It is becoming very difficult to find large industrial land sites within Miami-Dade County to develop Class A industrial projects. The Homestead area still offers these opportunities to developers of industrial space. The presence of large national companies such as Amazon, FedEx and others in this area along with the continued population growth in the Homestead area will continue to push rental rates up. Homestead has become the southern hub for South Florida commerce. Big names like Amazon, FedEx, Copart, Atlantic Sapphire and EcoSteel have already started creating a foothold in this rapidly expanding city.” – states George Pino, SIOR, RPA | President of State Street Realty, who represented Violet in the transaction.

EastGroup was represented in the transaction by The ComReal Miami Industrial Team of Ed Redlich, SIOR, CCIM, Patrick McBride, Esq., Chris Spear, CCIM and Edison Vasquez, CCIM with The ComReal Companies. “This is a very exciting and significant project for both the south Miami-Dade industrial market as well as the local community. The new warehouse construction will attract industrial businesses to the growing area and create hundreds of employment opportunities for local residents.” states Redlich. “Our team looks forward to marketing the project as South Dade continues to attract both large commercial investments and residents in droves. The project will provide a great option for the strong demand for dock high warehouse space in the area.”

For more information about this sale and other properties, please contact the ComReal Team at 786-433-2380.

The Miami industrial market’s Q1 vacancy rate was 4.6% at the close of the quarter with a $13.16 per sq. ft. average (gross) lease rate. Industrial The Miami industrial market’s Q2 vacancy rate was 3.9% at the close of the quarter with a $13.78 per sq. ft. average (gross) lease rate. Industrial vacancies have compressed after reaching higher levels in 2020. The annual rent growth is 9.2%. After trending in line with the country for most of 2020, growth in Miami is now three percentage points stronger in recent quarters.

There is over 4.4 million sq. ft. of new construction in the works, and about 4 million sq. ft. was delivered over the past year. This is including the one million SF Home Depot distribution center in Hialeah, which completed construction in early 2021. Most of what is being built is speculative. The largest speculative projects are in the 200,000 SF-300,00 SF range like the two buildings at Gratigny Logistics Center in the North Miami Beach Submarket, which totals 447,000 SF and is due to complete in coming quarters.

Vacancy rates in Miami are around 3.9% and are back below the National Index rate. Though international trade has been impacted by the Government-19 pandemic and shutdown, the e-commerce sector, including Amazon, has been responsible for many of South Florida’s largest lease deals in the past seven months. In April, Amazon leased about 220,000 SF at the newly built Prologis Beacon Lakes Industrial Distribution Center in the Miami Airport West Submarket. The company also leased a 210,000 SF property in the Hialeah Submarket, which it will occupy following extensive renovations. Vacancies could stabilize once the 4.5 million SF under construction delivers and leases. Construction starts have slowed, which along with a rebound in leasing in recent months could keep vacancies stable.

Annual rent has been rebounding after two years of slowing significantly stronger here, and annual gains are now about three percentage points stronger than the National Index. The average rent in Miami has grown 68% since 2011, while the National Index grew 56%.  Still, at over $13.50/SF, the average rent in Miami is one of the highest in the country and is more than 50% higher than the national average. Within the market, average rents reach $21.50/SF in the South Central Miami Submarket, which is more than 130% higher than the national average. Despite high rents, the submarket has maintained growth near 8% in the past year.

Annual industrial sales volume has bounced back and is now about 25% higher than the metro’s 10-year average. Deals over $20 million have become less frequent during the past year, with only nine deals in that range versus 17 deals in 2019. However, there have been a handful of smaller portfolios like the sale of buildings six and seven at County Line Corporate Park in Hialeah. In June, Chicago-based CenterPoint Properties acquired the two buildings totaling 412,000 SF from Miami-based Flagler Real Estate Services for $61 million. The 12-month sales volume growth is down 20.2%. Market prices are around $175/SF.

Though the region has regained some of its jobs toward the end of the year, as of the Bureau of Labor Statistics’ (BLS) release of April jobs figures, the metro was still down about 100,000 jobs since February 2020. Tourism has been greatly interrupted and the cruise industry with which Miami is intertwined will likely feel the lingering effects for some time. While the shape of the economic recovery from the past year is yet to be seen, in Miami it is likely to be prolonged. The high cost of living is likely to continue driving net negative domestic migration from the city. The good news is that no one industry accounts for more than 15% of Miami’s jobs, helping to insulate the city from higher losses as a proportion of the workforce during downturns.

There is over 3 million sq. ft. of new construction of warehouses in Miami in the works, and about 4.5 million sq. ft. was delivered over the past year. This is including the one million SF Home Depot distribution center in Hialeah, which completed construction in early 2021. Most of what is being built is speculative. The largest speculative projects are in the 200,000 SF – 300,000 SF range.

Vacancy rates for Miami warehouses are around 4.6% and are back below the National Index rate. Though international trade has been impacted by the pandemic, the e-commerce sector, including Amazon, has been responsible for many of South Florida’s largest lease deals in the past seven months. Amazon signed two large deals in 2020. In April, the company leased about 220,000 SF at the newly built Prologis Beacon Lakes Industrial Distribution Center in the Miami Airport West Submarket. The company also leased a 210,000 SF property in the Hialeah Submarket, which it will occupy following extensive renovations. Vacancies could stabilize once the three million SF under construction delivers and leases.

Annual rent has been rebounding after two years of slowing. Still, at nearly $13/SF, the average rent in Miami is one of the highest in the country and is more than 40% higher than the national average. Within the market, average rents reach as high as nearly $20/SF in the South Central and East Miami Submarkets which are nearest to downtown. These submarkets have had the most trouble maintaining growth and have had some of the lowest rent growth in the market in the past year. Still, at 4.5% or higher, annual growth in these submarkets has been considerable.

Industrial investment volume is down in Miami year-over-year but remains at more than $1 billion in the past year. Volume is slightly higher than the market’s 10-year annual average, but turnover has dropped below 5% for the first time in nine years. Deals over $20 million have become less frequent during the past year, with only nine deals in that range versus 17 deals in 2019.

Though the region has regained some of its jobs toward the end of the year, as of the Bureau of Labor Statistics’ (BLS) release of January jobs figures, the metro was still down about 115,000 jobs since February 2020. Tourism has been greatly interrupted and the cruise industry with which Miami is intertwined will likely feel the lingering effects for some time. While the shape of the economic recovery from the past year is yet to be seen, in Miami it is likely to be prolonged. Still, the market should benefit from its diversity. No one industry accounts for more than 15% of Miami’s jobs, helping to insulate the city from higher losses as a proportion of the workforce during downturns.

Featured Listing! Miami Warehouse at 16215 NW 15th Avenue in Miami

Miami Warehouse at 16215 NW 15th Avenue in Miami

South Miami-Dade Focus

Many industrial investors and developers are turning their focus to southern Miami-Dade County for the first time. This is largely driven by the lack of available industrial land in the northern parts of the County. Two large developers filed an application in March for the South Dade Logistics and Technology District, which is an 800-acre parcel of land located on the south side of Florida’s Turnpike and north of Southwest 268th Street, between Southwest 122nd Avenue and Southwest 107th Avenue. It would be just north of Homestead Air Reserve Base. The project would feature 5.9 million square feet of warehouses, 100,000 square feet of commercial space and a 150-room hotel.

In 2021, Amazon plans to open four new delivery stations in South Florida. Two of the facilities are in the South Dade market – one will be located at the corner of Southwest 136th Street and Southwest 132nd Avenue in Kendall (65,536 SF) and the other will be located at 3750 Palm Drive, in Homestead (145,125 SF). This is in addition to the 1,000,000+ SF distribution center Amazon got approved in 2020 just north of the Homestead Air Reserve Base.

ComReal recently sold 117 acres to Copart USA in the Homestead Park of Commerce for $35mm. With land prices at 30 – 50% of the value of industrial land in Northern Miami-Dade, investors and users should consider the growing South Dade market as an option for their investments and/or business operations.

ComReal Sponsors the 2021 Florida Cargo Brokers & Forwarders 2021 Golf Tournament!

For more info on Miami commercial real estate, please visit www.comreal.com. Thank you very much.

595 East 10th Avenue, Hialeah, Florida

Closed! The Industrial Team at ComReal announces the successful sale of the 39,000 SF warehouse facility at 595 E 10th Avenue in Hialeah, Florida. The seller, 595 Realty Corp, was represented by Patrick McBride, Esq. and Edward Redlich, SIOR, CCIM. CarSafe Storage purchased the warehouse for $3,350,000.

The property was extensively marketed for lease prior to the seller testing the sale market. Our team recognized the strength of the market, lack of buildings for sale, and advised the seller that the building would garner far greater attention on the sale side as prospects prefer to own in this neighborhood.

Once listed for sale, the property gained a ton of attention and we quickly had multiple offers. As we were about to finalize a purchase contract in early March with a buyer in the food industry, specifically in restaurant service, the China virus pandemic hit, and the buyer was forced to walk away at the last minute. In April, after the initial shock of the pandemic wore off yet still in the depths of the uncertainty and the economic crisis created by the virus, we were able to create a bidding war with multiple offers. This is a testament to the strength of the Miami industrial market.

In fact, the property sold for approximately $112 psf on a footprint basis, as the property features a 6,000 SF concrete mezzanine and 3,000 SF of second story office space. The buyer plans multiple improvements to the building, including a new roof, which makes the purchase price that much more impressive. “This property sold at the top of the market, and perhaps set a new bar in the neighborhood on a per square foot basis when you factor in the second floor mezzanine area and the deferred maintenance needed to make the property suitable for a new user” said McBride.

The eastern portions of Hialeah and the East Airport market have seen quite the impressive growth in both sale prices and rental asking rates over the past five years. This sub-market is becoming increasingly attractive to both users and investors as e-commerce continues to drive the need for in-fill development in areas located as close to population centers as possible. Owners in the area should take note that there will be a large volume of pent up demand from users who have contractual leases set to expire or who were looking to purchase a facility in 2020 for their operations but have now been delayed.

Give us a call if you have a warehouse coming available or you would like to further explore the options available to you in the market!

Closed! 80,000 sq ft freezer warehouse sold for $13,250,000 or about $165 psf. The property is located at 650 NE 185th Street in Miami, Florida. The seller, Best Freezer Holding, was represented by Edward Redlich, SIOR, CCIM along with the ComReal Miami Industrial Team and Michael Weihl with Sirius Business Advisors. The buyer, Ivy Realty, was represented by Larry Genet with CBRE.

Upon closing, a long term lease transaction was negotiated with a single tenant, True Grade Foods, which now occupies 100% of the building. Some of their business is related to the cruise line industry. Shortly after the property was placed under contract the outbreak of the China virus occurred. The buyer, seller and tenant began to re-question the transaction. However, the brokers were able to provide up-to-date date information on current market conditions as well as keep their respective clients committed to the deal. Redlich has coined the phrase “delayed deals are better than dead deals”.

The property is located just off I95 and is equidistant from PortMiami and Port Everglades. It is a class B building in a class B neighborhood. The freezer systems give the building the higher value. Click here for an Aerial Drone Video. >>>

The Miami cold storage warehouse market has been hot! “People have to eat” as the saying goes so this product type is very popular among investors. Ivy Realty had recently acquired the neighboring 235,000 sq. ft. refrigerated warehouse in Miami at 18770 NE 6 Avenue. And ComReal recently sold the 157,000 sq. ft. Sherwood refrigerated warehouse for $26,000,000. Read more on that story at Realterm Logistics Buys Cold Storage Warehouse in Miami. >>>

The ComReal Miami Industrial Team dominates the cold storage market in Miami. In addition, ComReal is now marketing two (2) other refrigerated warehouses in Miami. The 75,000 sq. ft. Opa Locka Cooler Warehouse is coming available for lease. Visit the Cooler Distribution Warehouse in Miami. They also have a 102,000 sq. ft. refrigerated warehouse in Doral listed for sale. Visit the Americas’ Gateway Park Building in Doral. >>>

ComReal presently represents a frozen food distribution company that seeks to rent from 80,000 to 100,000 sq. ft. of frozen warehouse space in South Florida. Please feel free to contact us anytime if you have a refrigerated warehouse available and/or would like to discuss the current industrial real estate market in Miami. Thank you very much.