"Warehouses here rarely sell at a loss," David Dabby, Integra's commercial market research director, tells GlobeSt.com. He says buying into a warehouse property is a dependable investment because about 50% of the valuation is in the land, which is going up steadily. That compares favorably to office building investments, which usually attribute 80% of the value to the building, which generally begins to physically depreciate immediately. The usual depreciation schedule for warehouses spans 75 years versus 40 years for office buildings.

Dabby says the value of warehouses held up even during the early 1990 recession in Miami-Dade, the industrial center of South Florida. His transaction review shows Miami-Dade received 62.2% of the money spent in the latest quarter, while 29.5% went to Broward and 8.3% to Palm Beach.

Inegra's research indicates that from 1995 to 1999, buyers bought 103.7 million sf in South Florida or about 20.7 million sf a year. The median price has gone from $30.68 per sf to $40.72 per sf, averaging about a 5.3% increase per year.

"This year we estimate about 17.5 million sf will sell," Dabby tells GlobeSt.com. "The modest fall is being brought about by lack of product as much as by economic slowdown, most of it in Miami-Dade County."

The analyst says the warehouse market is being driven by residential growth, foreign-related business such as the import-export sector and corporate relocations. "The tri-county area [Miami-Dade, Broward and Palm Beach] attracts a net population gain of 75,000 per year," Dabby says. "Any time you get new residential growth, warehouses have to follow."

Hot areas here include Miami-Dade's Airport West submarket and the area along the I-595 and I-75 confluence in West Broward. In East Broward, high activity centers in the Port Everglades area. South Palm Beach County's Congress Avenue north from Boca Raton through Delray along I-95, and Palm Beach International Airport have the highest demand.