International trade fuels commercial realty market rebound
By Patricia Hoyos
The Miami-Dade County industrial market is stronger than other US markets as a result of international trade and will continue to look up this year, the 2012 Commercial Industrial Association of South Florida market report states.
"The industrial sector is recovering quicker than other sectors of the commercial real estate market," said Hal Lewis, president of the Commercial Industrial Association of South Florida.
The economic strength of Latin America along with several Miami's infrastructure projects, which are underway, like the Port of Miami tunnel project are allowing for South Florida to continue to be a center for worldwide trade, said Thomas Dixon of Dixon Commercial Real Estate.
Through November, 79 warehouses over 10,000 square feet and 320 industrial condos were sold last year, according to the report.
For the rental market, the average vacancy rate for the county right now is 10%, which is lower than last year's 16%, according to the report.
However, not all properties are in high demand. Industrial and warehouse users in 2011 favored the newer western Miami-Dade properties over the older and functionally obsolete buildings that tend to be found in the eastern region, the report said.
The airport west region, which has a mixture of single and multi-tenant buildings designed for cargo distribution linked to the airport and seaport, continued to be popular destination for corporate headquarters for companies. Last year, 19 units were sold at an average of $78 per square foot. The vacancy rate for rental space is below the county's average between 7% and 9%.
Mr. Dixon, who helped compile the report, which was presented Friday, said the airport west area has the highest rates in the county, probably because that's where the newest industrial buildings can be found.
The Hialeah market has two separate market products, the older, smaller manufacturing buildings with strong demand and the older large buildings that are suffering high vacancies and lower rents.
Also experiencing both a strong and weak market is the center region, which is divided between properties on the east side of I-95 in the Wynwood Design District and those on the west side, resulting in a wide range of rental rates and vacancies. The smaller industrial buildings on the Wynwood side are being converted to art galleries, showrooms and studios, while the older and larger ones on the west side continue to serve industrial tenants.
Perhaps the weakest area for the industrial market is the south region, defined by the report as from southwest 152nd street to the Miami-Dade County and Monroe County line. The demand for space in the area continues to be weak, with moderate levels of vacancy at 10% to 20% and low prices. No buildings sold in the area in 2011, according to the report.
Despite its weakness, experts agree that the signs are pointing in the right direction for the industrial market in 2012.
"The tide is coming," Mr. Dixon said, "and things are getting better."
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