6M SF of Industrial Trades in First Half of 2004

MIAMI-As the Miami-Dade County industrial market improves steadily, space sold increased 175% for the first half of the year, compared with that period last year, which was a record year for sales, according to a Cushman & Wakefield mid-year report on the market.In the first two quarters this year, properties totaling more than 5.8 million sf changed hands, up from 3.3 million sf for the same time last year. About 90% of those sales are in the Airport West submarket, the largest in the county, the report states. Investor sales accounted for about 75% of total sales and are expected to remain high throughout the year.The strong sales activity is attributed in part to low interest rates. “Interest rates–and all the benefits that come with ownership, as opposed to leasing,” says George I. Pino of Codina Realty Services Inc.-Oncor International, an industrial broker in the city. “You can get what you pay for in terms of build-to-suits. There is a profit advantage … because you don’t pay a landlord,” as well as tax benefits, he says.In terms of sales activity, Pino expects a strong third quarter as well. “I still believe that heading into the third quarter, as long as interest rates [resemble current rates], that the demand for warehouse condos will be high,” he says. “We’re seeing a lot of companies that are wanting to own, as opposed to lease. And we’re seeing a lot of interest from Latin American markets.” Despite the strong sales in the market, year-to-date leasing activity was 2.9 million sf, down 31% from 4.1 million sf in the first half of 2003. The county had 14.1 million sf of available space at mid-year.In addition, construction activity has been strong this year, as 776,146 sf of space was delivered in the six-month period, compared with 703,158 sf at mid-2003. Also, according to the report, the mid-2004 overall vacancy rate of 8.9%, although flat compared with the first quarter, was 1.1 percentage points better than the 10% a year ago. The overall net absorption of negative 369,620 sf by the middle of this year was actually an improvement from the negative 515,602 sf at mid-2003.