MIAMI-South Florida’s industrial vacancy rates are among thelowest in the nation. So says Cushman & Wakefield’s thirdquarter statistics for Miami-Dade, Broward and Palm Beachcounties.

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Specifically, Miami boasts an 8.3 percent vacancy rate. Browardhas a 9.1 percent vacancy, and Palm Beach has a 9.9 percent vacancyrate. Of the top 34 U.S. industrial markets tracked by Cushman& Wakefield, these counties are among the top 12 markets withthe lowest overall vacancies in U.S.

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Additionally, South Florida ranks well below the 10.6 percentoverall vacancy rate for the U.S. industrial markets. Although theregion’s industrial leasing market has either remained stagnant ordecreased from this time last year, all three counties—which werecharting negative absorption at this point last year—have postedpositive absorption year-to-date.

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“Rental rates have stabilized,” Rick Etner, executive directorof Cushman & Wakefield’s industrial brokerage in Miami/Ft.Lauderdale, tells GlobeSt.com. “We aren’t seeing the free fallactivity, which is one reason why we have the institutionalinterest down here.”

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

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

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

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In Broward County, year-to-date leasing activity decreased 10percent from this time last year, ending the third quarter of 2010at 2.0 million square feet. Despite the slowdown in leasingactivity, overall absorption increased year-over-year, ending thethird quarter at positive 704,156 square feet, compared to negative2.8 million at this time last year.

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Palm Beach, the slowest market in South Florida to recover onall commercial real estate fronts, was the exception. Overallvacancy 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, totaling722,433 square feet year-to-date, a 25.5 percent drop from 970,023square feet leased at this time last year. Still, year-to-dateoverall absorption totaled positive 507,433 square feet, a majorincrease from negative 1.3 million square feet at this time lastyear.

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

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