Airport West accounts for nearly half of county's industrial leasing
By Eric Kalis
Airport West continued to be the catalyst for Miami-Dade County's industrial market through the first quarter of 2006, real estate experts say.
With demand for prime industrial space steadily increasing, construction will add more than 1.3 million available square feet, international commercial real estate firm Cushman & Wakefield said in its quarterly report.
Airport West was responsible for 46% of the quarter's overall leasing activity, which included 104,733 square feet of warehouse space at Northwest 97th Avenue rented by Faith Freight Forward Group Inc.
Airport West, meanwhile, will play a significant role in adding to the industrial space supply once 605,000 square feet under construction is complete, Cushman & Wakefield said. This includes Beacon Lakes Building 10, a 206,000-square-foot project expected to be completed by the end of the month.
The rise in construction has increased Airport West's inventory from 47.2 million square feet to 47.9 million, according to the Cushman & Wakefield report.
Despite these transactions, Jonathan Kingsley, executive vice president of real estate firm Grubb & Ellis, said expansion opportunities are limited in Airport West. Overall vacancies in the area dropped to 8.1% from 11.1% last year.
Cushman & Wakefield predicts vacancies will continue to drop throughout the year, which would drive up rental rates.
"Last year we saw strengthening from an occupancy standpoint, which has carried over into the first quarter of 2006," Mr. Kingsley said. "There are only two or three options in Airport West, a sign that the market is tightening. I get calls all the time for space that is not even on the market, but people want to buy it."
Ben Eisenberg, senior vice president at Trammell Crow Co., said available space has especially dwindled in the last few months, making renting a more enticing option. He said a coveted piece of Class A warehouse property in Airport West cannot be found for less than $8 per square foot.
"In the last 30 to 60 days there have been low vacancy rates," Mr. Eisenberg said. "It's difficult to find large blocks of space. I do not see anything on the horizon to change the market. There is strong rent growth and a significant lack of supply."
This dearth of available land puts landlords in an advantageous position, says Michael Rice, vice president of the Easton Group.
"Landlords are in the driver's seat," Mr. Rice said. "There is a real demand for smaller space. It is difficult to find any space at all."
Mr. Kingsley said the tight Airport West market is leading investors to less expensive locations, like Hialeah, where prices have doubled in the past decade.
"There is a trend in peripheral areas that is increasing proportionally," he said. "Large tenants are branching out."