MIAMI—As Florida's economy recovers, the industrial market is improving even faster, driven by foreign trade and investor confidence. Vacancy rates are dropping, tenants are arriving, and developers are delivering spec and pre-lease space at a rate not seen in a number of years.
So says Steven McCraney, CEO of McCraney Property. McCraney has his finger on the pulse of the market. His company is developing a new warehouse/distribution project in Palm Beach County. The speculative building is the first new construction at the park in five years.
Bent Oak Industrial, LLC, a wholly owned entity of McCraney, recently purchased Lots 3, 4 and 5 at the Bent Oak development in Orlando for $7.41 million. McCraney will build speculative class A distribution warehousing on the 38.7-acre industrial property.
McCraney also points to numbers that tell a story: More than 2.8 million square feet was delivered statewide, more than twice the volume delivered in 2012, according to CBRE. 2013 was the first year since the recession in which almost every regional market recorded substantial statewide rent growth. The overall total vacancy rate for the state ended the year at 8.3%, down 90 basis points from 2012. And, he says, builders expect to deliver approximately 4 million square feet this year.
“The industrial market is rebounding based largely on local economics,” McCraney tells GlobeSt.com. “While much of the state suffered through the recession, Miami-Dade County barely noticed the downturn due to strong international trade.”
As a result, the total vacancy rate in the county was just 4.8% at the end of last year, according to CBRE. Rents in South Florida increased 35% year-over-year to $7.71 per square foot at the end of 2013.
“The gains are even more remarkable given the collapse of the condominium market and that the county's unemployment rate soared to 13.3% in August 2010,” McCraney says. “That number has plummeted to about half that—6.6% in April of this year.”
As McCraney sees it, Miami is poised for explosive growth due to the opening on May 19 of the Port of Miami tunnel, which gives trucks direct access from the port to Interstate 95. The port has erected four Super Panamax cranes to serve a new class of super-sized container ships that will pass through the Panama Canal once it is widened and deepened.
“The market is already gearing up for the increased cargo traffic,” McCraney says. “Builders delivered more than 1.6 million square feet in 2013, and 2.9 million square feet is scheduled to come on the market this year.”
Be sure to come back this afternoon for part two of this article in the Miami edition. McCraney will explore the rest of Florida's industrial market.
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