MIAMI-Overall industrial vacancy rates for Miami-Dade, Broward and Palm Beach counties remain below the national average. So say first quarter statistics from Cushman & Wakefield.
The overall vacancy rate for the U.S. industrial market declined to 10.2% at the end of the first quarter. Vacancy in Miami-Dade declined to 7.5%, down from 8.9% a year ago. The first quarter vacancy rate in Broward was 9.3%, down from 10.2% at this time last year. In Palm Beach, the overall vacancy rate settled at 9.1%, down from 9.4% a year ago.
In Miami-Dade, industrial leasing activity totaled 1.4 million square feet, up 42.2% from the year-ago period. Broward racked up 691,947 square feet at the end of the first quarter, down 23.2% from the year-ago period. And Palm Beach increased 3.2%, totaling 239,368 square feet in the first quarter.
“The local economy is fueling the declining vacancy rates,” Chris Metzger, an executive director in Cushman & Wakefield’s Broward County office, tells GlobeSt.com. “Companies that had a good business model and survived the storm are now expanding. We have a lot of activity going on and nobody is building, so the vacancy rates will have nowhere to go but down because everything that’s coming online is being absorbed.”
No new industrial space was added to the market in Miami-Dade or Broward. Only 15,000 square feet of new industrial space was added to the Palm Beach market. As Metzger sees it, the bottom of South Florida’s market has come and gone. He says vacancy peaked at the end of the third quarter of 2009. Now, bidding wars for lease and purchase are increasingly common. Still, most industrial developers are sitting on the sidelines.
“You have a certain threshold you need to make money in a building,” Metzger says. “While the South Florida market has rebounded from its lows, it’s still not quite up to the level where it makes sense to build. The rates have to get up into the six-dollar mark on a consistent basis to see developments start to happen. But I don’t think we are that far away.”
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