These industrial properties in Miami are in demand by the following business types needing additional outside storage and/or parking: light and heavy manufactures; utilities; building supplies; construction; fuel;  trucking; shipping; freight; logistics; delivery; sales, service and/or repair of vehicles, heavy equipment, and more. As you can see, this list comprises of many types of businesses that operate here. Miami’s low supply of suitable properties makes it a challenge for them to identify and acquire the right property suitable to their needs.

As a rule of thumb, most warehouses have an average parking ratio of about 1.0 parking spaces per 1,000 square feet. For example, a 50,000 sq. ft. warehouse will have about 50 parking spaces. Anything below this ratio could be a sign of parking issues. If the ratio is higher than there might be ample parking just depending on the size and layout. Another rule of thumb is that if you are seeking to building a 40,000 sq. ft. warehouse for example, then you will need double the land size to put it on. So that is about 80,000 sq. ft. of land or roughly two acres.

The reasons for this lack of supply vary amongst the industrial sub-markets. In the older areas such as Hialeah and Airport East, buildings were built smaller and with lower ceiling heights. These were often constructed for clothing manufactures and food productions businesses who really did not need extra land. In addition, most of the County’s population at the time was concentrated further east and therefore workers, who often did not have their own personal cars, would walk or take the bus to work.

Nowadays in the newer sections such as Doral in Airport West Dade, larger more modern warehouses were constructed. However, due to the high demand of distribution space, most properties were built out to the minimum parking required. There is enough room for personal and trailer parking, but that’s about it. Also, outside storage can often not be allowed due to zoning or business park regulations.

The high value of land is another reason that vacant industrial sites were built out to the maximum amount possible. In the peak of the market from 2005 to 2008, industrial land was selling for about $25 per square foot or about $1,000,000 per acre. This made it cost prohibitive to acquire land that was not going to be used for vertical development which is more profitable. Miami-Dade County has the ocean on the south and east; and the Florida Everglades on the west, so there is not much more land that will be develop-able for industrial uses. We are not the only ones limited. In other parts of the country, industrial land is limited due to other natural blockades such as mountains, swamps, lakes, rivers, etc.

Recently, we just leased a 28,500 sq. ft. warehouse on two acres in Miami to a national transportation company. They appreciated the extra parking area for their trucks and personal vehicles. In fact, their broker had a very difficult time in finding a property that suited their needs. When they came across our listing, the negotiations proceeded expeditiously and the lease was soon finalized within just a few weeks.

ComReal is now marketing a 14,000 sq. ft. warehouse on two acres located at 6550 NW 74th Avenue in Miami. The entire truck court is gated and fenced in. The owner understands the value of the property. Unfortunately, too many property owners and developers make the mistake of over-building on their land. This may not only create functional issues for the property, but also severely lower the value! Prospective buyers and tenants in the market will discount the value of a property if it has functional problems. If you own or are considering buying a property, please be sure to keep in mind the future resale value of the property and the functionality to future users that will occupy it.

If your business requires an industrial warehouse building with extra land, please contact the ComReal Miami warehouse team at 786-433-2380. We specialize in these types of properties and could provide you with a preliminary site selection of available properties to suit your business operation. If you have any further questions and/or comments on this topic or a property that you have in mind, we’d be happy to discuss with you at any time.

The Miami industrial real estate market becomes more vibrant while the sales and leasing of other types of real estate properties remain weak. Nearly 1M square feet of Miami warehouse space was absorbed in the 3rd quarter of 2010 decreasing the vacancy for the third consecutive quarter in a row to 9.3%. The average lease rate slightly decreased to $7.02 psf on an industrial gross basis.

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

List of major leases for warehouse spaces in Miami:

352,000 sq. ft. by Bel, Inc. at Lincoln Logistics Park, Medley
201,399 sq. ft. by DHL Global Forwarding at MICC, Doral
182,000 sq. ft. by Global Ventures Intl. in Miami Lakes
175,000 sq. ft. by Carnival Cruise Lines at Centergate, Gratigny
144,000 sq. ft. by Econocaribe Consolidators at Airport in Miami
121,979 sq. ft .by  County Wide of Miami at Flagler Station, Medley
101,600 sq. ft. by Cash & Carry at 5590 NW 163rd Street in Miami
70,825 sq. ft. by Manray Express at AMB Distribution, Hialeah
65,120 sq. ft. by Brightstar at Beacon Lakes, Airport West Dade
65,069 sq. ft. by Martainer at Beacon Lakes, Airport West Dade
60,000 sq. ft. by Amcar Freight at Beacon Lakes, Airport West Dade

Miami Industrial Properties Sales and Leasing Activity cont…

In Miami, ComReal is credited with Aggreko’s lease of 31,000 sq. ft. at 3601 NW 123rd Street in Gratigny and 24,000 sq. ft. by Boston Med Devices at 2315 NW 107th Avenue in the Miami Free Zone in Doral. ComReal procured two of the largest warehouse lease transactions so far this year in Broward County with the lease of 44,000 sq. ft. by the Drug Enforcement Agency in Meridian Business Park in Weston and the lease of 55,000 sq. ft. by MSI at the Atlantic Business Center in Pompano Beach.

There were two major sales in Miami. The 268,000 sq. ft. Turnpike Distribution Center located at 11401 NW 134th Street in Medley. The multi-tenanted, warehouse building sold for $15,200,000 or $56 psf at a 8.5% cap rate. The Seller was RREEF and the new owner is Cabot. Palmetto Distribution Center located at 8001 NW 79th Avenue in Medley comprised of six buildings totaling 880,543 sq. ft. was purchased by AMB after a bidding frenzy by two dozen prospective purchasers.  The final price was an impressive $66,500,000 or $75 psf. The cap rate was 5.9%. The multi-tenanted properties were 95% occupied.

Edward Redlich of ComReal, was interviewed by Globe Street. “This sale makes a statement. Here’s an institution acquiring a property and they are not looking at 2010. They are looking beyond. They paid a premium for this asset. This is good class B functional warehouse space. AMB is making an investment in the future of Miami’s industrial market.”

It is worth mentioning the significant sales in nearby Broward County as well. RREEF purchased four buildings at Weston Business Center for $65,000,000. Duke Realty Corporation paid $20,000,000 for two buildings totaling 113,000 sq. ft. plus some extra land in Pompano Beach.

If you are interested in more details on other closed lease and sale transactions and/or the Miami industrial real estate market in general, please call our team at 786-433-2380.

Commercial Real Estate Events

ComReal takes an active role in learning about the organizations and economic engines that power Miami’s industrial market. We met recently met with Enterprise Florida and also attended their workshop on globalizing websites. Below are some other events that we attended over the past few months.

Recently, our team toured the Port of Miami to get updates on the following projects: Miami Tunnel, FEC railroad and the 50’ deep drudge. Read more about these stories here: <<click here>>

We also toured the cargo and maintenance warehouses at Miami International Airport. It is amazing the amount of air cargo the MIA handles. To view the Miami air cargo statistics: <<click here>>

ComReal Miami’s team attends the Airport West Business Association meets every Monday to discuss annexations in the Miami Airport West Dade area. Learn more about this very important issue at: <<click here>>