A STRONG QUARTER FOR INDUSTRIAL IN SOUTH FLORIDA
The second quarter of 2018 saw substantial growth in demand over the previous quarter, as positive net absorption totaled 1.4 million square feet, bringing midyear net absorption to just under 2.3 million square feet. This can be attributed to Miami’s strong second-quarter performance, highlighted by Amazon’s occupation of its new 836,000-square-foot distribution center. South Florida’s robust development kept vacancy level over the past 12 months, decreasing only 10 basis points to 4.0%. More than 5.1 million square feet of new industrial inventory has delivered in the past year, a 17.0% increase from the 4.3 million square feet delivered during the same period up to the close of second-quarter 2017. In spite of unprecedented construction activity, demand growth has kept occupancy hovering around the 96.0% mark.
The region saw a slight improvement with almost double absorption in the second quarter from a slower first quarter.
South Florida is seeing record breaking construction activity with over 5.6 million square feet underway.
Demand for higher-end space held strong, leading market fundamentals as warehouse/distribution space dominated leasing and construction.
Industrial rents continued to rise throughout the region, as landlords push rents upward and should continue to see steady gains over the next year.
Investment sales of lower-tier buildings continued to dominate transaction activity, while strong sale prices for higher-end new industrial space held.