MIAMI-Econocaribe, a warehousing distribution company, which handles commodities, signed an 144,000-square-foot lease at the 400,000-square-foot Airport East Distribution Center in Miami’s Central Miami-Dade submarket east of Miami International Airport. The 40-year-old building, which was a former Associated Grocers facility, recently underwent a $3 million renovation

Econocaribe has been in this submarket for several decades and needed a larger facility with more truck-loading space and a larger yard in which to store trailers, says Michael Silver, first vice president at CB Richard Ellis in Miami, who was the broker for the landlord, the Terranova Corporation and joint venture partner, Blackrock, a publicly traded asset management company.

The Airport East Distribution Center had been vacant for a long  time, says Silver. But in the last  two quarters, interest in industrial real estate in Miami-Dade, including the Airport East Distribution Center, has picked up dramaticcally, he says.

In order to attract tenants, in 2008, the owners of the Airport East Distribution Center  put in a new roof, redid the parking fields, put up a new fence and painted the building, says Ryan Grindler, director of acquisitions for the Terranova Corp. He says that in addition to Econocaribe, IC Industries, a Miami-based corrugated box company, occupies around 50,000 square feet at the facility.

Grindle agrees that activity in the industrial market has picked up in the last six months.  Everyone had cut back, he says, but as they start to increase inventory, they need somewhere to put it,” he says. This building is in a good location, located  between Miami International Airport, the Opa Locka airport and the Port of Miami.

Without question, 2009 was a year of uncertainty and there were few transactions, says Silver. But since the beginning of year, interest levels have picked up dramatically, he says.

Still, rents may bump along the bottom in 2010, says Silver. For the Airport East property, when the market peaked in mid 2007, rental rates were in the $6.0-$6.50 per square foot gross range, but now they are off by as much as 30% to 50%.

In suburban markets like Medley or Airport west, there has only been a 10% to 30% decline in rents, but in older core area, declines have been more like 30%  to 50%, says Silver.

Industrial landlords will quote the asking rental rates, says Silver, but when a live deal is presented, depending on the overall terms and quality of the tenant, the landlords can be aggressive also. Rents can be off by $2 per square foot of the asking rates. For an $8 per square foot rental rate, that can means a discount of 25%, depending on the size of the space. But if it is 50,000 square feet and above, a landlord will offer a better rate, says Silver.

"Last year in Miami-Dade County, there had been 5.9 million square feet of net, negative absorption in the industrial market, but this year, we are in positive territory," says Silver. "This year, in the first five months of the year, we have already absorbed several hundred thousand square feet in the industrial market," he says.