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(Crystal Proenza is associate editor of Real Estate Florida.)

FORT LAUDERDALE, FL-After a major dip in rental rates in 2008, Broward County industrial is in for further market softening. Local market reports show anywhere from an 8% to 11% year-over-year decrease in average rates for 2008.

With the number currently at $8.24 triple net, further compression is expected for this year as landlords make aggressive plays to retain and gain tenants, says Harry Tangalakis, senior vice president with CB Richard Ellis in Fort Lauderdale. However, the active negotiation could cause more deals to close sooner, Cushman & Wakefield reports.

“In addition, building prices will continue to decline, but vacancy could remain stable or only increase slightly because we’ve had a lot of shakeout from the industries that are going to be most affected at this point,” Tangalakis tells GlobeSt.com, citing companies aligned with lighting, electrical and building industries. New construction projects are also projected to decline in 2009 as more than 50% of the 1.8 million square feet of new product delivered to the market in 2008 remains vacant, according to Cushman & Wakefield.

“It’s typical of the Broward market to have brand new buildings sitting vacant because there are large amounts of top-of-the-line, second-generation product available with less-expensive rent,” says Jeffrey Scott with Fort Lauderdale-based Brenner Real Estate Group. However, there is still significant interest in the county, brokers assert.

Scott recently brokered one of the biggest lease transactions of 2009 so far at a newly constructed 49,000-square-foot building within Enterprise Center at 3150 SW 15th St. in Deerfield Beach. Tenant Advanced Media Technologies Inc. relocated and expanded from a space on Powerline Road and SW 10th Street, and will use the new building as its corporate headquarters, Scott explains. Enterprise Center, which totals 1.5 million square feet, enjoys a vacancy rate of only 3%, with permits for another 107,000 square feet that will be built based on demand, he says.

In terms of investment sales in Broward County, brokers are confident that 2009 will see a closer alignment between buyers and sellers. Last year ended with more than a 50% year-over-year decline in sales, much of which was due to the financial markets crisis and investors not willing to step off the sidelines, Cushman & Wakefield reports.

“During the second half of 2009, we’ll see more user-buyers making plays for properties,” Tangalakis predicts. “Institutional portfolios will continue to trade, primarily in the class A product line. At this point, class B and C user buildings are going to be trading close to the $80-per-square-foot price range, so it would behoove an owner/buyer to acquire an existing facility and ramp it up, rather than start with ground-up construction.”

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