INDUSTRIAL REAL ESTATE BOOMING IN SOUTH FLORIDA
This is a good time to own industrial property in South Florida.
The Daily Business Review reports that warehouse and distribution space has emerged as one of the most attractive income producing assets thanks to rising rents, booming demand, low vacancies, interest from national tenants and multimillion dollar improvements in South Florida ports and transportation infrastructure.
In Miami-Dade County practically all of the 207 million-square foot inventory is spoken for. In Broward County 94%, and in Palm Beach County, 95% of the inventory is occupied or under lease. Growing demand has been the driving force in sales and even spaces not constructed yet are being wildly sought after. There is currently 866,000 sq. ft. of space being constructed for demanding tenants in Miami, 755,000 sq. ft. in Palm Beach and 542,000 sq. ft. in Broward Counties.
Although there have been some large lease deals, the bulk of the business has been with spaces ranging from 15,000 to 50,000 square feet with 20,000 being the suite spot. The areas of business that appear to be needing space include freight forwarders, third party logistics providers, health care distributors, contractors and other entrepreneur types.
New warehouses offer first-time amenities not previously available to smaller companies for tenants paying high end rates. The average lease rate per square foot in February, 2015 is $8.15 in Miami-Dade County, $7.39 in Broward and $8.35 in Palm Beach County.
For sure, it has become a landlord’s market. And commercial leases can be tricky to negotiate as there are many ways for the unwary to lose money on the deal without knowing it, i.e. pro rata CAM sharing, Definition of operating expenses, escalations of base rent, escalations of CAM, land leases, wrap around mortgages, options, and so on.
Be sure to consult experienced real estate counsel before entering into negotiation with a commercial landlord. That step alone can save many thousands of dollars over the term of a commercial lease.