For the first time, the average asking gross lease rate for warehouse space in Miami is now above the $10.00 per sq. ft. mark (but, just barely). Strong market forces and higher rents for new buildings have helped make this happen. Landlords will continue to push rates even higher, however this first quarter shows a slight increase of the average vacancy rate to 4.3% and the positive absorption was only 10,422 sq. ft. which result in tenants having some leverage during negotiations.

So far this year, there have been three large lease transactions over 100,000 sq. ft. which included Nestle Waters, GRM Information and Kuehne + Nagel. The Miami industrial market does not see too many transactions over 100,000 sq. ft., so this is an encouraging way to start off the new year.

The most noteworthy sale was Duke Realty’s acquisition of the 35.1 acres site formerly owned by Universal Forest Products for $35,700,000 or about $23 psf. The site at 10300 NW 121 Way in Medley is currently being operated as a lumberyard in over 450,000 sq. ft. of warehouses. Duke is planning a future industrial development here. The largest industrial assets on-the-market now are the first three new warehouses within Countyline Corporate Park.

If you would like to read last quarter’s report, please view: ComReal’s Miami Industrial Real Estate Report for the Year End 2017. >>>

Please join Edison Vasquez and Ed Redlich at Florida International University, on May 15th, for a discussion on the industrial real estate market in Miami, as well as a career in commercial real estate.

Miami Warehouses Leased in 1st Quarter 2018 (partial list):

* Deals closed by the ComReal Miami Industrial Team

Featured Listing! The Hellman Logistics Office Space (for Lease).

ComReal is pleased to announce our recent assignment to lease a portion of the office space located within the Hellman Logistics Building at 10450 Doral Boulevard. There is 3,000 sq. ft. of office space coming available. Please contact Patricia Quintana, CCIM at 305-815-3376 for more info and/or arrange a tour.

Please mark your calendar for Wednesday, May 16th for a presentation on FDA best practices for distribution of refrigerated food products at PortMiami. Sponsored by ComReal!

News Release! 47,500 sq. ft. Warehouse in Gratigny Leased!

The Miami Industrial Team at ComReal announces the completion of a long-term lease for the 47,500 sq. ft. building, known as the Gratigny Warehouse, at 3360 NW 110th Street in Miami, Florida in Seaboard Industrial Park. Only six months after being sold and having gone through renovations, the building will now be occupied by HardTen Clothing Inc., a clothing company relocating its headquarters from New York. This brings the building to 100% occupancy. About 40-50 new jobs will be created. We are experiencing the trend where companies are fleeing states with high taxes and regulations then relocating to Florida. For more info on this story, please visit The Gratigny Warehouse Leased! >>>

Congratulations to our friends and neighbors, Coastal International Logistics, for renewing their lease here at the Miami Free Zone in Doral!

Florida Business Rent Tax Reduced!

Thanks to the lobbying efforts of Florida Realtors and other pro-business organizations, the state sales tax on rent has been reduced in Miami-Dade County from 7.0% to 6.8%. In addition, HB 7087 was recently passed in the state legislature further reducing the tax to 6.7% commencing next year. No other state has a tax on commercial rent. Plus, it is a sales tax on top of property taxes. Not fair! Our goal is for this tax to be 0.0%.

The new year has started very strong for the Miami industrial real estate market. The average lease rates have already increased to $8.53 per sq. ft. and the average vacancy rate fell to 5.2%. The net absorption for the 1st quarter was an astounding 1.4M square feet. The largest lease so far this year was Synergy Custom Fixtures lease of the 301,000 sq. ft. warehouse at 215 SE 10th Avenue in Hialeah. This property was formerly occupied by Lagassee Sweet and Banah Sugar. There have been three lease transactions over 100,000 sq. ft. so far this year. In 2014, there was only a total of three. The average Miami warehouse user does not typically occupy larger space.

The largest sale of the year was Barclays Capital’s disposition of Centergate at Gratigny also located in Hialeah at 6301 East 10th Avenue. Prudential Real Estate Investors closed on the deal at $95,750,000 or about $98 per sq. ft. This included the adjacent 29 acres which will be developed in the future. The existing warehouse is now occupied by Caterpillar Logistics, Bullet Line and Carnival Cruise Lines. Most of the new construction and new deals continues to be in the Medley and Airport West Dade sub-markets, but no longer in the City of Doral which has evolved into a live, work, play community with less focus on industrial.

Meanwhile, Florida Realtors and other trade organizations continue to lobby the state to reduce and/or eliminate the 6% state sales tax on commercial leases. Florida is the only state in the union that has such a tax. The state is also guilty of double taxation by taxing rent paid for property taxes as well. This is simply not fair. By eliminating the tax, more businesses will be encouraged to expand in Florida. Also, did you know that April 24th, 2015 is this year’s Tax Freedom Day? Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year. To read more, visit The Tax Foundation. >>>

In case you missed our prior report, you may click this link for ComReal’s Miami Industrial Real Estate Market Report for the Year End 2014. >>>

New Listing! Miami Gardens Freezer/Cooler Warehouse for Sale/Lease:

The ComReal Industrial Team is pleased to announce our new listing of the Miami Gardens Freezer/Cooler Warehouse. This is the largest, available refrigerated warehouse for sale or lease in South Florida. The warehouse is 80,000 sq. ft. and could have active CSX Railroad service. For more information including an aerial video tour, please visit the Miami Gardens Freezer/Cooler Warehouse. >>>

Miami Warehouses Leased in 1st Quarter 2015 (partial list):

* Transaction(s) brokered by The ComReal Companies.

Miami Warehouses Sold in 1st Quarter 2015 (partial list):

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:

Miami Warehouses Sold:

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:

25,000 sq. ft. Doral Warehouse Space (with or without Coolers) for Lease in PS Business Parks’ Miami International Commerce Center (MICC) >>>

15,000 to 30,000 sq. ft. Doral Warehouse Building for Lease in Westpoint Business Park >>>

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.