Dade Industrial Shows Positive Leasing

Sustained demand for South Florida industrial space is keeping a surge of new development from dangerously overbuilding the tri-county marketplace.

Figures from Cushman & Wakefield show just over 6.3 million sf of first-half leasing and sales transactions in Miami-Dade County for manufacturing, warehouse/distribution and office/service space. Countywide, the area had a positive net absorption of 405,675 sf. About one-third of that activity was in the nearly 42 million-sf Airport West submarket.

In that market, abundant construction and a softening of Latin American economies contributed to negative six-month absorption of 452,370 sf, pushing up the vacancy rate to 12.1% from 10.1%.

Despite higher vacancies, Airport West continues to flourish as Miami-Dade’s most sought-after industrial submarket, not only by freight forwarders prizing its convenience to the airport but also by high-tech firms. Owners of warehouse space with asking rents averaging 6.35 psf are rushing to convert whatever such facilities they can to switch and web-hosting facilities leasing for $10 to $20 psf.

New industrial construction in Broward County sent the countywide vacancy rate up 1.1 percentage points to 6.6%. at mid-year. Nevertheless, the overall weighted average psf rent rose from $6.45 at mid-1999 to $6.53

. Industrial leasing and sales totaled over 3.6 million sf during this year’s first six months. North Broward (Pompano Beach, Deerfield Beach and Coral Springs/Margate) continues to pace the county’s industrial activity, with this submarket’s 1.2 million sf of first-half deals bringing down the vacancy rate there by 1 full percentage point to 3.6%.

Palm Beach County’s more modest first-half industrial construction of just under 300,000 sf sliced 50,000 sf from available inventory on the heels of more than 1.2 million sf of leasing and sales volume. The mid-2000 industrial vacancy figure was just 4.1%.

While current industrial development is double what it was at this time last year, it is not expected to add much more than 1.2 million sf to the county’s industrial space inventory. About 90% of that new product is in Boynton Beach–a substantial chunk of it at Quantum Corporate Park where New York-based Benenson Capital is building a major office/industrial complex. Miami-Dade has an industrial inventory of 143.3 million sf in 2,934 buildings; Broward,73.8 million sf in 1,949 buildings; and Palm Beach, 38 million sf in 906 buildings.