Naples, FL Industrial Market Report
Market Overview
The Naples industrial market in southwest Florida is relatively small but highly attractive to investors. With a limited supply of industrial space, the vacancy rate remains low. Construction activity is limited, which is expected to keep the vacancy rate low in the coming years. Rental rates in the area are steadily increasing, making Naples the most expensive industrial market in southwest Florida. This has attracted the interest of both local and national investors, leading to an impressive sales volume in the past year. Despite its size, the Naples industrial market continues to garner attention and demand due to its unique characteristics and attractive rental rates.
Naples is the priciest industrial market in southwest Florida, boasting an average asking rent of $15.70 per square foot.
Rent & Vacancy Fundamentals
The Naples industrial market continues to see positive rent growth, with rents increasing by 9.4% in the last 12 months. The current asking rent rate is significantly higher than pre-pandemic levels, despite being lower than the peak observed in mid-2022. However, asking rent growth is expected to slow down in the upcoming quarters. Naples is experiencing an extremely tight vacancy rate of 1.2%. Currently, there is 180,000 square feet of industrial space available in the entire market, which is considerably low. The low vacancy rate can be attributed to the limited construction that has taken place in the Naples metro region over the past several years.
Construction
Naples saw the delivery of 952,000 square feet of industrial space in Q2 2023. A majority of that can be attributed to the delivery of a 950,000 square feet warehouse for the wholesaler, Uline. Currently, there are two properties under construction, encompassing 31,550 square feet. The North Naples submarket is adding a 23,750 square feet showroom on 5705 Taylor Rd, which is expected to be completed by August 2023. Another 7,800 square feet industrial warehouse on 2447A Pine St, East Naples, is expected to be completed around the same time.
Sales
The 12-month sales volume for the Naples industrial market is $90.6 million.
Investment activity in the Naples industrial market has experienced a significant increase in 2023, with total sales volume amounting to over $55 million in the first six months of the year. In the last 12 months, 91 properties have traded. The largest transaction this year was the sale of a Warehouse leased by tenants such as FedEx and Sherwin Williams, which was sold for $16 million.
