Brian Smith

HOMESTEAD, FL—Much has been said on Miami's growing reputation as a hotbed for industrial activity. The region is now considered a top-tier U.S. market alongside peers such as New Jersey, Chicago and Northern California. But in the race to becoming one of the country's top industrial contenders, one submarket seemingly got left behind.

In the past decade, Homestead, a potential key distribution point for both Southern Miami-Dade County and the Florida Keys, has seen virtually no new industrial construction. But the tide looks to be changing as Homestead experiences significant growth in population, commerce and infrastructure.

GlobeSt.com sat down with JLL Managing Director Brian Smith to discuss how pent up demand for Class A industrial space is ushering in a new era of development in Miami's Homestead submarket.

Why has industrial construction in Homestead been stagnant in recent years?

Smith: Much of this can be credited to an overbuilding of multi-family product and single-family homes in the early 2000s that destabilized Homestead's real estate sector when the Great Recession hit. When the market turned during the financial crash, the bulk of new development activity was centered around the more established industrial markets of Doral, Medley, Hialeah Gardens and Northeast Dade. Developers knew what to expect in those areas while it was harder to quantify demand in Homestead as there was no true baseline of industrial product to compare to. With the region's economy now sky rocketing, Homestead is one Miami-Dade submarket that can serve as a blank canvas for new warehouse and logistics space, making it ripe for industrial development and investment.

How are Homestead's market fundamentals spurring development?

Smith: Homestead is currently home to a blue-collar workforce of 32,900 with a total residential population that is projected to increase 7.7% by 2023. This influx of residents and businesses has created a need for nearby distribution centers that can service a burgeoning local economy. The bottom line is that Homestead is fast growing, and it is time for the area's industrial sector to catch up.

What are some of the marquee projects rising in Homestead?

Smith: The most notable development is Southend Industrial Park, a planned project located within the Homestead Park of Commerce. Southend spans 117 acres with zoning and entitlements for just over 1.3 million square feet of industrial development. The project's first 32,000-square-foot, Class A warehouse was built entirely on spec and delivered in 2017. The facility was quickly leased to Goodman Distribution, a manufacturer of air conditioning and heating systems, and Frito Lay. A second, 42,000 square-foot industrial building is already in the works. The master planned park is one of the only new industrial projects in the region that offers users the flexibility to purchase buildings, lease space or pursue build to suit opportunities.

What role does Homestead play in Miami-Dade's broader industrial market?

Smith: Homestead is evolving into a “relief valve” for denser submarkets where little to no land is available for large-scale industrial development. The market is a final frontier for large occupiers who require significant amounts of land that simply do not exist in more northern areas of the county. Manufacturers and distributors who require less physical building space, but more acreage currently have very few options in Miami-Dade. For example, Julio Gimenez, a son of Mayor Carlos Gimenez and a longtime construction executive, is pursuing 124 acres to build a $240 million eco-friendly steel mill in Homestead, the only market in our region that can accommodate a new project of this scale. HHomestead's connectivity, growing labor pool, rising amenities and attractive pricing are priming the pump for a major resurgence.