DORAL, FL-After years of negative absorption, Miami’s industrial market may be poised for recovery. PS Business Parks is betting on a comeback with a 135,000 square foot expansion at Miami International Commerce Center at 8216 NW 14th St. in Doral.
The expansion marks the largest block of new space to come online in the Airport West submarket in recent years. The project includes a new 75,000 square feet of Class A industrial building and an additional 60,000-square foot redevelopment. The entire park offers 3.2 million square feet.
“The fact that this was the only new building in the last 18 months got us some attention,” Viola Sanchez, division vice president of the Southeast for PS Business Parks, tells GlobeSt.com. “Pricing is still not where we’d like it to be, but it’s stabilizing a little bit and we’re seeing a demand for this space because we’re catering to small- to mid-size tenants.”
Even with the new space, the park is 97 percent occupied. The new building is 33 percent leased and the redevelopment is 15 percent leased. Sanchez expects the new space to be close to 100 percent occupancy by early 2011. With an industrial market rebound underway, and with a prime location facing the Palmetto Expressway, industry analysts expect the project to fare well.
“The Airport West submarket is one of the strongest, if not the strongest as far as occupancy and rates are concerned,” Audley Bosch, associate director at Cushman & Wakefield Miami, tells GlobeSt.com. “MICC’s tenant mix is mostly businesses in the 3,500 to 10,000 square foot range. The soft spot in the market is anything north of 30,000 feet.”
Miami’s overall industrial vacancy rate fell 0.6 percentage points from first quarter to 8.3% at mid-year, according to Cushman & Wakefield. This rate was the lowest reported in the past four quarters, signaling that declining vacancy will be a continued trend. The Airport West and Medley submarkets accounted for the majority of transactions signed during the first six months of the year.
With a rebounding market, landlords are shying way from long-term leases at discounted rates. Sanchez says MMIC may offer a year or two of aggressive rates, but the rental rates spike at the end of the lease on the expectation that the market will recover. Sanchez declined to disclose asking rents on the new space.
Still, MMIC is not immune to ongoing commercial market challenges in Miami. Despite Sanchez’s optimism, Bosch isn’t betting that the new space at MMIC will fill up fast.
“MMIC is going to have its struggles, but they do have a big advantage with the location and the build out,” Bosch says. “And by catering to smaller tenants, they are not putting all their eggs in one basket. If one or two tenants fall out, they won’t feel much impact as parks that rely on larger tenants.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
