Outlook Bright for County Industrial Market

MIAMI-The first quarter indicates the Miami-Dade County industrial market will experience an upturn this year, states Cushman & Wakefield’s first-quarter industrial report for Miami-Dade County. The improvement of the economy and job growth in Florida are expected to fuel the market.In the first quarter, the county’s overall vacancy rate dropped 0.4 of a percentage point to 9%, from 9.4% a year earlier. The weighted average asking gross warehouse/distribution rental rate was unchanged from a year ago at $6.10 per sf. The market did experience net absorption of negative 67,087 sf, but that is a big improvement compared with the negative 492,173 sf in net absorption for last year’s first quarter, according to the report.The county’s biggest industrial submarket, Airport West, saw a 1.1 percentage point decline in its overall vacancy rate from 13% at the end of the first quarter of 2003 to 11.9% a year later. Also in this submarket, leasing activity was up year to date to 748,000 sf in the first quarter, compared with 729,000 sf in last year’s first quarter. This is attributed to big tenants returning to the market, the improved national economy and a positive outlook for Latin America, C&W reports.A struggling Airport West faces the task of absorbing 600,000sf of vacant sublease space, largely due to EGL Global Logistics’ relocation to a different, 363,000-sf facility. Falcon Forms did lease 105,000 sf of the EGL space. Meanwhile, things are looking up in the neighboring submarket of Airport North/Medley. This submarket saw a 1.5 percentage point decline in its overall vacancy to 9.1%, compared with 10.6% at this time last year. It has helped that the submarket absorbed much sublease and direct space in the fourth quarter of last year and this year’s first quarter. Two deals that contributed were DMJ Logistics’ 77,686-sf lease at 9110-9200 N.W. 105 Way and Iron Mountain’s 86,400-sf lease at 8601 N.W. 81 Rd, the report adds.North Central Dade, one of the healthiest industrial markets in the county in the last couple of years, saw a 1.1 percentage point rise in its overall vacancy to 7.1% in the first quarter, compared with 6% the same time last year. Tenant relocations and downsizing is much to blame. However, the outlook here is positive, as vacant land is scarce and new construction is minimal, the report states.Countywide, low interest rates and a favorable financing environment are expected to lead to a continuation throughout this year of the strong sales activity experienced in 2003. Four major portfolio sales in the last six months led to a total $380 million invested in the Miami-Dade County industrial market.It seems the county’s industrial market has stabilized, according to the report. Strengthening US and Latin American economies should increase demand, bring about activity and place upward pressure on asking rental rates. With more activity, the market is expected to absorb space and improve in the second quarter as well.