South Florida’s industrial market, the region’s bellwether commercial sector, is showing signs of softness as vacancy rates crept up across the region in the third quarter, a recent Colliers report shows.
In Miami-Dade County, landlords dropped the average asking rent for a second consecutive quarter, after record highs in early 2024 and late 2023.
Yet, institutional investors seem unbothered by signs of a plateauing industrial market, considering a handful of trades that occurred in the third quarter. For example, San Francisco-based Prologis picked up the former headquarters for a Verizon subsidiary near Doral for $54.5 million. The firm plans to redevelop the one-story building into a logistics facility. In another deal, Bryn Mawr, Pennsylvania-based Alliance HP made its first foray into South Florida’s industrial market by paying $24 million for a Hialeah warehouse.
Miami-Dade County
The average asking rent dipped to $16.42 per square foot in Miami-Dade County in the third quarter, compared to $17.16 per square foot during the same period of last year. The rate also dropped 20 cents compared to the second quarter of this year, the report shows.
Miami-Dade’s vacancy rate widened to 4.9 percent in the third quarter, compared to 2.6 percent during the same period of last year. July through September, industrial landlords leased 2 million square feet of space in Miami-Dade, Colliers found.
In addition to Prologis and Alliance HP deals, Irvine, California-based Panattoni Development acquired the former headquarters of the Miami Herald in Doral for $29.9 million. The firm is planning to redevelop the 9-acre site into a spec industrial project.
Also in the third quarter, Coral Gables-based Codina Partners and San Antonio, Texas-based Affinius Capital sold a warehouse in Hialeah’s Beacon Logistics Park. The real estate arm of The Church of Jesus Christ of Latter-day Saints paid $55.8 million for the 232,629-square-foot facility.
Broward County
Landlords in Broward County are still in control, raising the average asking rent to $17.14 per square foot, compared to $15.89 per square foot during the same period of last year, the report shows. The increase marks the fourth consecutive quarter of rent growth for Broward.
In Broward, the vacancy rate inched up slightly to 4.9 percent in the third quarter, compared to 4.7 percent during the same period of last year. Industrial property owners in the county leased 1.5 million square feet from July through September, according to the report.
Significant deals during the third quarter included Dallas-based Dalfen Industrial’s acquisition of a three-property portfolio in Fort Lauderdale for $26.4 million, and New York-based Brookfield Asset Management buying a 154,234-square-foot warehouse for $24.4 million, also in Fort Lauderdale, the report shows.
Palm Beach County
Landlords are also in command in Palm Beach County, hiking up the average asking rent to $15.43 per square foot in the third quarter, compared to $14.36 per square foot during the same period of last year, Colliers found.
However, the vacancy rate rose to 6.8 percent in the third quarter, compared to 4.9 percent during the same period of last year, the report shows. Increased vacancy is the result of 1.9 million new square feet of industrial space that came online during the third quarter. Only 41 percent of the new space is leased, the report states.
Notable deals in the third quarter included Brookfield’s $36.2 million purchase of three buildings in West Palm Beach from New York-based DRA Advisors. In another deal, Delray Beach-based residential developer Kolter Group bought five industrial buildings in the firm’s home city for $21.8 million. Kolter plans to redevelop the 12.3-acre site, but has not disclosed details about the project.
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