Miami-Dade saw nearly 3.9 million square feet leased year-to-date, up 4.6 percent from 3.7 million square leased at midyear 2009. Overall absorption was much improved, with positive 1.5 million square feet absorbed year-to-date, compared to negative 3.2 million square feet at this time last year.

“The continued interest long-term in serving the South Florida and Central and South America areas from a desirable destination point has helped the market,” Sky Groden, a senior director at Cushman & Wakefield’s industrial brokerage in Miami/Ft. Lauderdale, tells GlobeSt.com. “The cruise ship industry is driving growth, and beverage and food distributors are doing well. What needs to happen now is a recovery in the construction market.”

Construction drove much of South Florida’s growth in the up cycle, Groden says, and unless the industry rebounds he expects the industrial market rental rates plateau. What’s more, he says, until vacancy rates get down to the 5 percent to 6 percent rage, Groden doesn’t expect to see industrial developers break ground on new projects, save perhaps some build-to-suits.

In Broward County, year-to-date leasing activity decreased 10 percent from this time last year, ending the third quarter of 2010 at 2.0 million square feet. Despite the slowdown in leasing activity, overall absorption increased year-over-year, ending the third quarter at positive 704,156 square feet, compared to negative 2.8 million at this time last year.

Palm Beach, the slowest market in South Florida to recover on all commercial real estate fronts, was the exception. Overall vacancy increased in Palm Beach County during the third quarter, reaching 9.9 percent, up from 9.2 percent at midyear 2010. The third quarter showed a slowdown in leasing activity, totaling 722,433 square feet year-to-date, a 25.5 percent drop from 970,023 square feet leased at this time last year. Still, year-to-date overall absorption totaled positive 507,433 square feet, a major increase from negative 1.3 million square feet at this time last year.

“We continue to be bullish on the South Florida,” Etner says. “We think the positive absorption will continue and vacancy rates will continue to decline through the fourth quarter. Next year we think rental rates will probably be back to normal as many of the newer buildings have been fully absorbed at very low rental rates.”