Industrial Supply in Miami-Dade Outpaces Absorption for First Time in 4 Years

South Florida is seeing some mixed results for the industrial sector, with Miami-Dade County seeing a big change in supply versus demand.

This is based on three separate insight market reports from JLL, which not only evaluated the third quarter performance in Miami-Dade but in Palm Beach and Broward counties too.

While Miami-Dade finished the third quarter with a positive net absorption of 1.5 million square feet, the figure failed to outpace supply for the first time since 2020. That led to vacancy ticking up 70 basis points from the June ending quarter to 3.9 percent.

Along with calling it an “abundant” level of supply, JLL reported that a total of 2.7 million square feet was delivered this quarter, with a total of 6.8 million square feet having delivered so far this year.

It was a similar story in Palm Beach, which posted the highest vacancy rate out of the three counties at 4.5 percent in the third quarter, representing a 60 basis point increase. Net absorption for the third quarter was 215,617 square feet and more than 427,000 square feet year-to-date. Year-to-date deliveries are over 1.2 million square feet. Also, Palm Beach has the cheapest rental rates, averaging $14.88 triple net.

Broward strung together better numbers, with its vacancy rate at only 3.3 percent – the lowest of the three counties. Only 310,957 square feet of new product is under construction. However, leasing did face a “slow down,” with renewals and leases recorded at about 350,000 square feet, according to JLL. Palm Beach went through a similar struggle, with its figure being roughly 400,000 square feet.

Leasing was at its strongest in Miami-Dade, which commanded more than 800,000 SF of new deals and renewals. Miami International Freight took the top spot for the largest new lease, with its 105,960 property. And the biggest renewal went to Starboard Holdings for an 184,968-square-foot space.

JLL offered an outlook for each county going forward. Broward is expected to continue seeing low vacancy rates thanks to scarce inventory. The influx of supply is anticipated to “affect short-term vacancy rates” in Palm Beach. And as new developments get completed in Miami-Dade, inoccupancy is expected to “fluctuate”  in the county. However, Miami-Dade is projected to experience rental rates increasing “steadily.”

“Looking ahead, Miami-Dade’s industrial market will continue attracting institutional capital for further investment and growth,”  JLL said.