With the beginning of the New Year it is time to look back at what has happened in the real estate market and to project what to expect for the coming year. The “Industrial Association of Dade County” (IADC) has become the “Commercial Industrial Association of South Florida” (CIASF) with an emphasis on all aspects of commercial real estate including office buildings, shopping centers and industrial/warehouses. This year’s Industrial Market Report contains the same emphasis as prior years. For reporting purposes, Miami-Dade The following is a summary of the information in that report. County is divided into seven areas based on typical properties in each area.
Supply of Industrial Space: For the year 2006 industrial space increased by 2,174,000 SF as compared to the prior year of 1,783,000 SF. This represents a moderate increase in the annual supply of new industrial space.The area of Northwest/Medley had the greatest growth 599,000 SF.
Industrial Employment: 2007 industrial employment in manufacturing, trucking/warehousing and wholesale trading increased to 185,100 from 182,500 in 2006. This increase was primarily in wholesale trading.
Total Freight: Cargo movement through the Port of Miami decreased to 7,835,131 tons down from 8,654,000 while cargo at the Airport increased to 2,038,000 up from 1,662,000 tons.
Demand/Supply for Industrial Space: Based on industrial properties available for lease vacancies rates ranged from a low of 2% to a high of 10% in the seven regions described in our report. This variation is the result of additional supply and changes in demand. The highest vacancy rate was 10% in Hialeah.
Rental Rates/Sales Prices: With over 419 properties having a total of 11,316,000 SF for lease, rental rates ranged from $8.50/SF to $11.25/SF. This variation results from the variety of product type from large older, street level warehouses to 100% AC flex space with office and warehouse areas.
Sales for the year of 2007 through November for buildings over 10,000 SF totaled 144 with a total of 5,711,900 SF. Sales prices ranged from $72/SF to $106/SF; again, the wide variation results from the different property types.
Summary: As in years past our industrial market report provides a snapshot of conditions and influences for 2008: Tenants are “right-sizing”, this is a trend to examine realistic needs and consolidate their operations into smaller spaces. Although the number of businesses in the area remains constant, they are consuming less square footage. One effect of Miami’s increase in traffic congestion is the need for distribution companies to have distribution hubs in Miami. State government has not been able to reduce real estate taxes or insurance. These continue to discourage companies to relocate to South Florida. As a result of the downturn in local and national economies, rental rates for properties have stabilized and are trending downward. With stable rental rates, property values in the coming year will be based more on rental income rather than resale value at a future date.
If you’d like more information about the “Commercial Industrial Association of South Florida” send an e-mail to [email protected] or you can view the entire Market Report on our website www.dixoncommercialre.com