South Florida Industrial Market Report

Miami Market Overview

Miami’s industrial market benefits from its position in South Florida, which is home to the ninth-largest population in the U.S. Its industrial sector, particularly, benefits from proximity to Miami International Airport and the Port of Miami. Both facilities make the metro a standout for industrial distribution as international and domestic carriers export their cargo here.

Miami Market Performance

Absorption levels in Miami have begun to decelerate, leading to the current vacancy rate of 5.0%. Over the past 12 months, there has been 1.2 million square feet of absorption, which is lower than the five-year average of 3.1 million square feet. There were also several companies that vacated their spaces this year and in 2023, contributing to the increase in vacancy.

Compared to previous years, construction has begun to moderate with around 4.3 million square feet underway as of Q4 2024. Submarkets in northwest Miami will see the largest amount of construction, with 90% of deliveries targeting this area. This is due to the lower construction costs in this part of the metro.

Sales activity has also begun to decrease, with $1.7 billion in trades over the past 12 months. The largest sale for 2024 so far occurred in July for a building inside a warehouse facility. It was sold for $55.9 million, or $240 per square foot.

Miami By the Numbers

Vacancy Rate: 5.0%

Rent Growth: 2.7%

Deliveries in SF: 7.8M

Last 12 Months | Source: CoStar Group

Fort Lauderdale Market Overview

With a variety of jobs in the business services segment, Fort Lauderdale’s population boasts a median household income that is 5% higher than Miami’s. Its location between Miami and Palm Beach is also advantageous for industrial properties as it facilitates exporting goods. Port Everglades is also located here, which was noted as the third-largest port in Florida for the import and export of TEUs as of 2022.

Fort Lauderdale Market Performance

Industrial properties in Fort Lauderdale have noted an increased number of moveouts and negative absorption of 54,000 square feet. This activity has increased vacancy to 4.6%, which is up from the low vacancy of 3.2% achieved in 2022. New supply has also impacted the vacancy rate as only 350,000 square feet is underway, a level below previous metrics of 1.5 million square feet in deliveries.

Sales activity has also begun to slow down with $806 million achieved in sales over the last 12 months. Institutional owners have made their way into the market since last year, and made one of the most notable sales for 2024. This June, institutional owner IDI Logistics sold Rock Lake Business Center to Tishman Speyer for $63 million. This transaction is part of a portfolio sale that also bought properties in other South Florida industrial markets.

Fort Lauderdale By the Numbers

Vacancy Rate: 4.6%

Rent Growth: 3.5%

Deliveries in SF: 1.4M

Last 12 Months | Source: CoStar Group

Palm Beach Market Overview

The personal income rate in Palm Beach is 60% higher than the state average, due to the large number of office-using employers. Many new offices have relocated here, such as Goldman Sachs and Elliot Management, contributing to employment growth. The Port of Palm Beach is also located here, which is the most significant source of industrial activity.

Palm Beach Market Performance

Slower absorption metrics and tenant moveouts have contributed to vacancy increasing to 6.2%. There was 480,000 square feet of absorption over the past 12 months, which is down from the absorption of 2.2 million square feet in 2022. Despite the slowdown in absorption levels, Palm Beach’s vacancy rate still remains below the U.S. average of 6.8%.

Industrial properties here have also noted a decrease in construction levels, with 960,000 square feet underway as of Q4 2024. This is a drop from 2023 when around 1 million square feet delivered at the start of that year. Now, the majority of properties that are under construction are for facilities larger than 100,000 square feet.

Palm Beach By the Numbers

Vacancy Rate: 6.2%

Rent Growth: 4.8%

Deliveries in SF: 2.4M

Last 12 Months | Source: CoStar Group