Broward County Industrial Market Report
Market Overview
The industrial real estate market in Broward County has experienced notable dynamics and trends in recent quarters. Vacancy rates have remained relatively low, especially compared to similar-sized industrial markets in Florida. The tight vacancy rate, combined with a slower economic environment, has impacted lease volume. Additionally, the limited availability of developable land has constrained construction activity. The tight market conditions have also resulted in significant annual rent gains, positioning Broward County as one of the strongest-performing industrial markets in not only Florida, but also the country.
Highlights
- The 12-month rent growth remains high at 15.2%, exceeding the historical average of 4.9%.
- 240,000 SF has been delivered, and 87,000 SF has been absorbed in the Pompano Beach submarket.
- 80% of the total industrial properties with more than 100,000 SF are located in the Northeast, Pompano Beach, Southeast, and Southwest Broward submarkets.
- Fort Lauderdale has consistently maintained lower vacancy rates compared to the rest of the U.S., except for the year 2020.
Rents | Vacancy | Construction
Broward County’s industrial rent growth remains among the highest in the nation, along with Orlando and Miami.
Broward County’s industrial market has experienced robust tenant demand, resulting in record-high rents of $17 to $21 per square foot, which are among the highest in Florida. The market has witnessed a significant rent increase of more than 49% since 2019, surpassing the national average gain of 31%. This growth has been primarily driven by logistics assets. The rolling 12-month absorption has consistently outpaced deliveries since Q3 2021, leading to a decrease in vacancies to a low of 3.7% in Q2 2023, down from over 6.0% in Q2 2021. Despite supply and demand imbalances affecting vacancies in many U.S. markets, Broward County’s vacancies are expected to remain below the national average of 4.0% due to limited available industrial space. Construction activity in the area has also slowed down in recent years, with roughly 1.3 million square feet of construction underway as of Q2 2023. This shows a significant decline from the peak observed in H1 2020 when around 3.4 million square feet was under construction.
Sales
Broward County’s industrial properties have experienced strong pricing appreciation, with gains of over 12% annually, surpassing the U.S. average of over 5%.
The industrial real estate market in Broward County has experienced remarkable growth, surpassing historical averages in terms of sales volume. With a 12-month sales volume of $1.5 billion as of Q2 2023, the market has outperformed the average of $561.4 million. This surge in activity is exemplified by a recent significant transaction involving the sale of a 123,062 square-foot warehouse in Pompano Beach for over $28 million, with Blackstone Inc. acquiring the property from IDI Logistics. Given the slowing economy and rising interest rates, it is expected that transaction activity in Broward County’s industrial real estate market will become more subdued throughout the rest of 2023.
