Last week Andrew and I presented the 2009 Miami-Dade County Industrial Market Study to over 240 members of the Commercial Industrial Association of South Florida. This is 14th year we have reported on the industrial market conditions in South Florida.
The Market Trends Section reported a growth in industrial space for the year of 2007 of just over 2,000,000 SF a decline of about 10% from the prior year. This downward trend was also evident in the industrial employment sector showing an employment decline of 2,500 to a total employment of just over 182,600. For the year of 2008 projected total freight at the Port of Miami declined by 6% while freight through Miami International Airport remained the same.
The Market Activity Section shows a decrease in the volume of warehouse sales from 144 in 2007 to 74 in 2008 and a decline in the average sale price from $85/SF to $71/SF. The industrial condominium market also slowed with a volume of 349 in 2007 to 167 in 2008 and an average price decline from $149/SF to $144/SF.
Because of the variety of warehouse/industrial properties in various locations Miami-Dade County is divided into seven regions based on similar types of properties in each region. All regions are reporting an increase in the amount of rental space available, an increase in the vacancy rate of 2% to 5% and rental rate declines of $2.00 to $4.00/SF.
- Landlords are accepting lower rents and are offering short term leases, free rent and property renovations.
- Operating expenses are stable with declines in insurance premiums offset by increases in real estate taxes.
- Sales prices will depend more on income potential with sales prices declining from 20% to 25% in some areas from the peak in 2005-2007.
- On the positive side the weak US dollar has encouraged the expansion of international trade increasing the demand for warehouse space. In addition, land which was to be used for residential development is becoming available for future industrial development. However, due to the decline in rental rates and difficulty of obtaining financing new construction will decline for the next several years.
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 and download the entire Market Report on our website www.dixoncommercialre.com
By Tom Dixon