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SOUTH MIAMI INDUSTRIAL PORTFOLIO | MARKET OVERVIEW
The Property is located within the Miami-Dade County industrial market, which
comprises approximately 160 million sq. ft. The County, which is the epicenter
of the sprawling South Florida area, is the most populous in the state of Florida
and has historically been at the forefront of Florida’s rising population and
growing economy.
ECONOMY
County economic indicators point to improving market conditions. The
unemployment rate decrease 1.0 percentage point year-over-year to 6.1%, with
27,900 jobs added within the county from one year ago. Trade, transportation
and utilities was a large job creator, up 2.4% or 13,700 jobs in this area alone.
MARKET OVERVIEW
Vacancy rates remained stable as new product was delivered to market and
flight-to-quality reigns in the key submarkets, Airport West and Medley. The
overall market direct vacancy rate improved half a percentage point to 6.0%
over the last 12 months. Year-to-date leasing activity totaled 2.2 milion square
feet, a 17.0% increase from 1.9 million square feet year-over-year. The significant
increase this year was one of the factors in the drop in vacancy and will translate
into additional positive absorption as tenants occupy their space. Overall
absorption is on track to record its best year in the last decade.
Overall direct net asking rental rates across all product lines showed a year-over
increase of 9.5% to $6.91 per square foot. The warehouse/distribution sector
had a 10.0% jump in asking rent on heightened demand from existing tenant
expansions and new-to-market tenants.
OUTLOOK
The industrial market’s core fundamentals will remain positive for the remainder
of the year and into the beginning of 2016 as new constructions stays aligned
with increasing demand. Currently, several requirements of 100,000 square foot
and beyond for new-to-market tenants as well as local expansions are searching
for space. The healthy activity indicates a strong pipeline of positive absorption
for the foreseeable future.
MI AMI - DADE COUNTY I NDUSTR I AL TRENDS - Q3 20 1 6
Economic Indicators
Market Indicators
(Overall, All Classes)
Overall Net Absorption/Overall Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
Q3 15
Q3 16
12-Month
Forecast
Miami-Dade Employment
1,227. mil
1,358.6 mil
Miami-Dade Unemployment
6.4%
5.6%
U.S. Unemployment
5.2%
4.9%
Q3 15
Q3 16
12-Month
Forecast
Vacancy
6.5%
4.4%
Net Absorption (sf)
417,699
712,127
Under Construction (sf)
1,076,390 4,507,643
Average Asking Rent*
$6.95
$7.32
*Rental rates reflect net asking $PSF/year
Economy
The economy in Miami-Dade demo strated steady momentum in
the third quarter as several key economic indicators remained in
positive territory. The mark t finish d the third quarter with an
unemployment rate f 5.6%, down 80 basis points (BPS) year-
over-year, with the addition of 11,700 jobs. Office-using and
construction jobs were the strongest sectors in Miami-Dade.
Market Overview
The industrial market in Miami-Dade County ended the first half
of the year on a promising note. The overall vacancy rate closed
the quarter at 4.4% even as 1,738,240 square feet (SF) was
delivered in t first nine months of th year. New speculative
class A pr duct coming onto the market has steadily been leased
up with an influx of larger sized tenants (+80,000 SF) circling the
market. One reason for the rise in leasing activity was the high
ownership costs coupled with a surge in new projects that has
led to a better cost structure for leasing compared to ownership
for prospective tenants.
Leasing activity totaled 892,000 square feet (SF) in the third
quarter with a majority of space leased in the Airport North,
Airport West, and Medley submarkets. As a major logistical
market, warehouse/distribution space accounted for an
impressive 92% of the total space leased and accounted for the
majority of the 4.5 million square feet (SF) of total space
currently under-construction. Over 30% of the space under
construction has been pre-leased with activity and demand
driven by e-commerce and logistics companies.
The market has recorded 2.2 (MSF) of positive overall net
absorption year-to-date. Limited developable land has hiked land
prices back to or above peak while tenant demand for product
remains strong. These factors had the effect to push up direct
rental rates for all property types to $7.32 per square foot triple
net.
MIAMI-DADE INDUSTRIAL
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
-300.0
-100.0
100.0
300.0
500.0
700.0
900.0
2011 2012 2013 2014 2015 2016
Net Absorption, SF (thousands)
Asking Rent, $ PSF
Overall Ne Absorption/Over ll Asking Rent
4Q TRAILING AVERAGE
Overall Vacancy
Q3 15
Q3 16
12-Month
Forecast
Vacancy
6.5%
4.4%
Net Absorption (sf)
417,699
712,127
Under Construction (sf)
1,076,390 4,507,643
Average Asking Rent*
$6.95
$7.32
*Rental rates reflect net asking $PSF/year
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