Miami, FL Industrial Market Report
Market Overview
Miami serves as a global gateway, making it a crucial hub for international trade. Renowned for its international connectivity, Miami International Airport ranks fourth in the United States for cargo traffic. The Port of Miami holds the 11th position in the nation for the largest containerized port. Recent investments exceeding $1 billion have allowed it to accommodate the new Super Post Panamax mega-ships. These solid international connections not only attract importers and exporters but also enhance competition and market rent growth, outperforming the national market trends, a trend anticipated to continue in the near future.
Highlights
- Miami’s industrial net absorption totals over 2.5 million square feet, down from elevated levels of over 8.2 million square feet leased through Q2 2022.
- Miami is the second most active market in Florida for industrial development, trailing only Orlando.
- In the past two years, more than 70% of newly leased spaces exceeding 200,000 square feet have been primarily located in the Outlying Miami Dade and Medley submarkets.
- The largest sale year-to-date has been the sale of the 185,000+ square foot Pan American North Business Park located in Medley.
Rents | Vacancy | Construction
While the overall market has shown robust performance, the growth in asking rents has started to decelerate. It has shifted from its peak at approximately 20% in Q3 2022 to about 11.2% as of Q4 2023.
Despite a slowdown in rent growth, rents in the Miami market have still managed to reach an all-time high due to high tenant demand. Asking rents are currently around $20 per square foot, which is among the highest rents in all of Florida. Lease rates for properties in the 10,000 to 200,000 square foot range have varied, spanning from approximately $6 per square foot to well over $38 per square foot. These rates are significantly influenced by factors such as building age and quality. Limited availability and a slower economic environment have kept vacancies low, currently at 2.5%, noticeably less than the national average of 5.3%. Construction activity has intensified in recent years, with a substantial development of more than 9.1 million square feet currently in progress as of Q4 2023.
Sales
Sales volume is down from the record levels reached in 2022. The most substantial individual property transaction in 2023 has reached approximately $43 million or exceeds $187 per square foot. As of Q4 2023, the 12-month sales volume stands at $1.5 billion.
Miami by the Numbers Last 12 Months
- Vacancy Rate: 2.5%
- Rent Growth: 11.2%
- Deliveries SF: 3.1M
- Net Absorption SF: 2.5M
- Sales Volume: $1.5B
Miami-Dade Submarket Spotlights
Hialeah
The Hialeah industrial submarket currently has a vacancy rate of 3.0%, which has gone up by 1.2% in the last 12 months. Over this period, there have been approximately 390,000 square feet of negative absorption and no new deliveries. The rental rates are approximately $14.60 per square foot, marking a 10.7% increase from what they were a year ago.
Hialeah by the Numbers Last 12 Months:
- Vacancy Rate: 3.0%
- Net Absorption SF: (388K)
- Deliveries SF: 0
- Rent Growth: 10.7%
- Sales Volume: $187M
Medley
The Medley industrial submarket currently has a vacancy rate of 1.9%, which has seen a significant decrease of 1.7% in the past year. In contrast, the broader Miami market had a smaller increase of 0.2%. Over this period, there was a positive absorption of about 900,000 square feet, and 210,000 square feet of new space became available. The rental rates are approximately $18.70 per square foot, reflecting an 11.6% increase from their level one year ago.
Medley by the Numbers Last 12 Months
- Vacancy Rate: 1.9%
- Net Absorption SF: 899K
- Deliveries SF: 214K
- Rent Growth: 11.6%
- Sales Volume: $390M
North Miami Beach
The North Miami Beach industrial submarket currently has a vacancy rate of 2.3%, which is nearly the same as it was a year ago. Vacancy has only increased by 0.1% during this time. Over this period, 660,000 square feet of new space have been delivered, and 600,000 square feet have been absorbed. The rental rates stand at approximately $17.80 per square foot, showing an 11.4% increase from their level one year ago.
North Miami by the Numbers Last 12 Months
- Vacancy Rate: 2.3%
- Net Absorption SF: 600K
- Deliveries SF: 663K
- Rent Growth: 11.4%
- Sales Volume: $90.6M
Doral
Doral is situated at the heart of the Miami area, positioned to the west of Miami International Airport and the Hialeah Intermodal Rail Yard. Annual industrial net absorption totals 27,000 square feet, with a vacancy rate of 3.4%. Due to the limited availability of space, Doral has seen a significant increase in annual rent prices, ranking as the fifth highest among all of Miami’s submarkets with a gain of over 11.3%.
Doral by the Numbers Last 12 Months
- Vacancy Rate: 3.4%
- Net Absorption SF: 27.3K
- Deliveries SF: 435K
- Rent Growth: 11.3%
- Sales Volume: $382M
