In the third quarter, Miami-Dade, Broward, and Palm Beach counties saw significant increases in their median asking rents, with rises of 14 percent, 16 percent, and 18 percent, respectively, compared to the same period last year, according to a recent report from JLL.
This surge in rents in South Florida’s industrial market is an ongoing trend. The availability of warehouse space was limited in the third quarter, as vacancy rates in the three counties remained below 4 percent, according to JLL.
Although new projects are expected to contribute approximately 12 million square feet of industrial space by year-end, construction is slowing due to economic volatility. The report notes that current development timelines have been delayed, as market sentiment has shifted to a more cautious approach, with insurance premiums impacting various aspects of real estate, leading both investors and tenants to be more cost-conscious in underwriting, development, sales, and leasing.
Here’s a breakdown by county:
Miami-Dade County:
- In the third quarter, the median asking rent in Miami-Dade County increased to $16.80 per square foot, up from $14.35 per square foot in the same period last year.
- Landlords had the upper hand, as the vacancy rate remained low at 1.6 percent, continuing a year-long trend.
- The county’s industrial market saw a net absorption of 4.1 million square feet in the third quarter, compared to 3.4 million square feet during the same period last year.
- New projects representing 8 million square feet of industrial space were under construction in the third quarter.
Broward County:
- The median asking rent rose to $15.43 per square foot in the third quarter, up from $12.89 per square foot in the same period last year.
- Broward landlords also benefited from a low and steady vacancy rate of 3.4 percent, year-over-year.
- Net absorption in the third quarter was 172,000 square feet, down from 2 million square feet during the same period last year.
- Developers are currently building 1.5 million square feet of new industrial space in Broward.
Palm Beach County:
- In the third quarter, the median asking rent increased to $14.48 per square foot, up from $11.84 per square foot in the same period last year.
- This 18 percent price increase was the largest of all three counties.
- The vacancy rate in the third quarter rose slightly to 3.8 percent, compared to 3.1 percent in the same period last year.
- Net absorption was 412,000 square feet in the third quarter, down from 580,000 square feet during the same period last year. However, the development pipeline is set to add 2 million square feet of new industrial space by the end of the year.
Notable transactions in these counties include projects like the Sycamore Logistics Center in Medley, the Bridge Point Doral lease by Frito Lay, and significant acquisitions by Link Logistics and Sterling Investors in Broward. In Palm Beach County, the 7th Avenue Logistics project in Lake Worth is expected to draw tenants.
