Broward Industrial Market Gets Stronger, Miami-Dade Stabilizes: Q2 Report

The industrial market is still hot across Miami-Dade and Broward counties.

Competition for industrial space is fierce in Miami-Dade and it’s driving demand from buyers and tenants who are eyeing smaller warehouse properties. That, in turn, is leading to higher lease rates, according to a recently released report by CBRE.

And in Broward County, a dip in vacancy rates is helping lure more outside investors and tenants amid a sizable amount of new industrial deliveries.

MIAMI-DADE

Vacancy rates in Miami-Dade held steady at 3.6 percent in the second quarter, up slightly from 3.5 percent the same period of the previous year.

Most of the leasing activity occurred in Airport/Doral (557,124 square feet), followed by Central Dade (218,984 square feet), and Miami Lakes (94,900 square feet), according to the report.

Rents are also rising. Miami-Dade’s industrial market had an average asking rate of $9.23 per square foot in the second quarter, up 3.9 percent compared to the same period of 2017, according to CBRE. More than 90 leases were signed totaling 1.9 million square feet, with an average lease size of 20,000 square feet, the report shows.

Overall sales for Miami-Dade’s industrial market during the second quarter amounted to $362 million with 34 transactions for a total of 2.5 million square feet, up from $78 million for 15 sales totaling 553,000 square feet in the first quarter. The average sale price per square foot in the second quarter was $145, and the average deal size was 73,500 square feet.

Hialeah continues to be a top industrial submarket in Miami-Dade. The North Hialeah submarket accounted to 50 percent of the industrial transactions in the second quarter of 2018. Among recent deals was Duke Realty’s $180 million purchase of Flagler Global Logistics’ 8 million-square-foot industrial park.

Nine buildings were delivered in the second quarter, totaling 1.1 million square feet of new industrial space. Foundry Commercial’s Carrie Meek International Business Park is among one of the largest industrial projects under construction in the region, totaling 855,000 square feet and set to be completed by the fourth quarter of 2018.

Despite numerous larger transactions, spaces in the 10,000-square-foot to 25,000-square-foot range are the most desired, and is expected to push rental rates for those buildings up near those sought for newer construction, according to the report.

BROWARD

Broward’s industrial market is showing no signs of slowing down. Vacancy rates dipped in the second quarter to 3.9 percent from 5.3 percent, on a year-over-year basis, the report shows.

Leasing activity was mixed within the region. Northeast Broward had the highest level of net absorption during the second quarter, at 168,672 square feet, but southeast Broward saw a negative absorption rate of 334,533 square feet. The report said the level of negative net absorption is due to the addition of at least three new buildings in the Pompano Center of Commerce as well as the 131,000-square-foot East Davie Commerce Center.

Broward’s industrial market had an average asking rate of $8.29 per square foot in the second quarter, up 3 percent compared to the same period of 2017, according to CBRE.

Overall sales for Broward’s industrial market reached nearly $200 million in the second quarter. Notable sales include Fortress Investment Group’s $66.4 million acquisition of a SuperValu distribution center in Pompano Beach, as part of a larger $483 million national portfolio deal. Another is Exeter Property Group’s portfolio sale of nine warehouses amounting to about $43 million.

Supply is also increasing in the county. One of the first buildings of the South Florida Distribution Center in Pembroke Pines is on the verge of being completed, offering 225,000 square feet, according to the report. Seneca Commerce Center I, spanning 222,000 square feet at Pembroke Park, and Coral Springs Commerce Center III, with 215,500 square feet, are on pace to be completed by the third quarter of 2018 and the beginning of next year, respectively.

Low vacancy rates and rising rents are expected to keep driving demand in Broward, the report says.

 

Source: The Real Deal

Hollywood Eyes Key Industries To Spur Job-Creating Economic Growth

The City of Hollywood is working to develop and expand targeted industries to become more successful, resulting in higher paying jobs and ultimately more money for the City.

Health Care

Memorial Healthcare System, one of the largest in the nation and it is continuing to grow.  Memorial Regional Hospital is the flagship facility of this system. It offers extensive and diverse health care services that include Memorial Cardiac and Vascular Institute featuring renowned surgeons, Memorial Cancer Institute and Memorial Neuroscience Institute providing innovative technology.

There is Joe DiMaggio Children’s Hospital at Memorial, one of the region’s leading pediatric hospitals. It offers a comprehensive scope of healthcare services and programs in a child-friendly atmosphere. It is a full-service hospital and offers treatment for minor illnesses, trauma-related accidents, and complex medical conditions. It combines advanced technology and the expertise of a large group of board-certified pediatric specialists. The hospital has 226 beds.

Tourism

Tourism and hospitality is another major objective. The Diplomat Beach Resort has completed major renovations and offers many high-end restaurants and amenities. The Margaritaville Hollywood Beach Resort offers fine dining a high-quality hotel, a beautiful pool, and other amenities. And there are other hotels located at Hollywood Beach and throughout the city.

Aerospace and Aviation

Hollywood is home to HEICO Corporation, is a top manufacturer of aerospace, industrial, defense and electronics products. They make products that are found on commercial airplanes, military aircraft, industrial turbines, targeting systems, and missiles. HEICO operates in two segments, the Flight Support, and Electronic Technologies Group.

And there is Quiet Technology Aerospace which recently moved into a 30,000 square foot facility. This company performs repair work for aviation. It is a market leader in the application of advanced composites for noise attenuation and structures.

The Fort Lauderdale Hollywood International Airport is one of the fastest growing airports in the nation. Major developments are underway and new destinations are being added.

Marine Technology

Marine technology is another major industry for Hollywood. Most of Port Everglades is in Hollywood. Each cruise ship that comes to the port brings thousands of passengers. And there is more development taking place with cruise terminals.

A major expansion project at the port will allow larger freight ships to come to the port and all this means more people and money coming into Hollywood. Quantum Marine Engineering of Florida is a leader in producing stabilization technology for yachts. The company is operating in Hollywood. There are many other businesses that are prospering in the marine industry. Nova Southeastern University is operating an Oceanographic Center in Hollywood for various research programs.

Education and Technology

In the area of education and technology, Barry University recently opened a health sciences building in Hollywood, adding to a number of high-quality private schools, charter schools and public schools in the city.

And there are many other thriving businesses in the City. Chewy.com has a location in the City. In addition to developing these key industries, small businesses throughout the city are thriving and offering career opportunities for residents.

 

Source: Hollywood Gazette

Tracking E-Commerce To A Career In Industrial Real Estate Brokerage

Doubts of growing your retail brick-and-mortar clientele have you reaching for antacid from the bubble wrap parcel on your porch?

Don’t post a “closed” sign on your commercial real estate journey. Instead, consider pivoting to 32-foot clear heights and secured trailer parking.

E-commerce keeps growing. In 2017, U.S. online retail sales increased 16% year-over-year, up four out of five years running, and yielded $453.5 billion in total sales, according to CBRE.  Of the 50 largest industrial leases finalized last year, approximately 43% involved e-commerce companies.

For some, specializing in industrial brokerage may be the way forward. Experts see the logistics real estate market as early stage.UBS forecasts the pace of change in e-commerce is expected to accelerate market-share transfer, from in-store retail sales to online, driven by quicker-than-expected adoption of mobile from consumers.

Speaking to the crowd at I.CON ’18 in June in Jersey City, the Senior Managing Director with Crow Holdings Industrial Clark Machemer put it, “Today’s warehouse industry is the logistics business.”

Now may be time to synchronize your industrial sales and leasing future, as demand is up for real estate along the rapid throughput supply chain. CBRE calculated that for an incremental $1 billion growth in e-commerce sales, an additional 1.25 million square feet of distribution space is needed to service the growth. NAIOP, the Commercial Real Estate Development Association, cited Forrester’s forecast where U.S. e-commerce sales will rise 9.3% annually over the next 5 years to top $523 billion.

Media interest in e-commerce has added foot-candle on the interrelationship of goods fulfillment factors and real estate. Of course, there’s the Amazon HQ2 bonanza. Over in home improvement, Home Depot is gearing up to spend $1.2 billion across five years on 170 distribution facilities to access “90% of the U.S. population in one day or less.”

In this unfolding era of omni-channel retailing, industrial pros know expanding the supply of new construction and repurposing obsolete facilities is about satisfying the space race. Site selection for first mile, middle mile and last mile facilities won’t just affect industrial parks. Inner cities are in play. It’s about population. Many e-commerce companies and third-party logistics providers want a perch near densely-packed rooftops of consumers.

Earning Their Business

With e-commerce projected as a growth driver over the next five years for both the U.S. economy and development of facilities, what imperatives should e-commerce clients expect from their industrial real estate brokers?

“E-commerce clients expect a level of sophistication from the industrial brokerage business that didn’t exist 10 years ago,” says William Waxman, executive vice president at CBRE.

Waxman is an authority on corporate, industrial and supply chain real estate. In 2017, he was awarded NAIOP New Jersey’s Industrial Deal of the Year for Blue Apron’s 495,000-square-foot lease.

“My e-commerce clients expect me to have a comprehensive understanding of what they’re doing,” Waxman says. “Not just an understanding of their business, but an understanding of their values. And to respect their values, and to make sure the developments, the facilities are respectful of their values, as well.”

Waxman, who also was a speaker at I.CON ’18, is well regarded for maintaining relationships.

“E-commerce clients especially want to know they have a trusted advisor in their industrial broker. They want to know everything will get done at a very high level. From a tertiary environment to a primary environment, the quality of the work will be the same no matter where the properties are located,” said Waxman.

Representing In A Disruptive Age

Whether you’re already growing your book of business or shifting careers, specializing in logistics real estate on property types that support e-commerce may be your next thing.

“It’s the kind of industry you just need to be passionate about,” Waxman says. “When your clients have a pain point, you must have a solution for them.”

Waxman observes clients in e-commerce desire collaboration, and hire a multitude of service providers on deals, so they expect connections from the broker.

“You’ve got to know the right experts, as a service of building-out their project teams,” Waxman advises. “My e-commerce and tech clients want me to recognize through cost-benefit analysis whether they would benefit from a particular economic incentives package, or benefit from an in-depth labor analysis. Don’t be transactional brokers. Be a resource. You’re working for their best interest. Whether you’re onsite at a trucking company, or in a Fortune 200 board room, show how you’ll save them money. It goes to their bottom line.”

Even though Waxman leads CBRE‘s world renowned Port and Integrated Logistics Practice, he doesn’t forget to pound pavement.

“Old-fashioned shoe leather – there’s nothing wrong with that,” say Waxman.

 

Source: Forbes

South Florida’s Commercial Market Post Gains Across All Sectors

According to the new 1Q 2018 The Quarterly Report – South Florida Commercial Real Estate released this week by data firm Vizzda and the MIAMI Association of Realtors, South Florida‘s multifamily real estate transactions jumped 8.5 percent year-over-year in 1Q 2018 and per-unit multifamily prices increased in Miami-Dade, Broward and Palm Beach counties.

“Increasing population, job growth and rising single-family home prices are increasing demand for South Florida multifamily properties,” said 2018 MIAMI Commercial President Brian Sharpe. “South Florida’s new transit options such as the new Brightline Miami-to-West Palm train service is fueling more multifamily growth.”

Palm Beach County Posts a Banner Quarter for Multifamily Sales

Palm Beach County posted a record 34 multifamily transactions in 1Q 2018, totaling nearly 2,200 units for $151,600 per unit. The West Palm/Riviera Beach and Green Acres/Palm Springs sub-markets had the most transactions with 12.

The South Florida tri-county region finished with 140 multifamily transactions in 1Q 2018, an 8.5 percent increase over the same period last year.

Miami-Dade County had the highest number of transactions at 65, which was in line with the third and first quarters of 2007 but lower than the strong showing in 4Q 2017. Broward, meanwhile, saw an increase in multifamily transactions because of a rise in transactions in Fort Lauderdale.

Miami-Dade County Enjoys Retail Growth in 1Q 2018

Miami-Dade County retail enjoyed strong year-over-year growth in transactions, square footage and dollar volume transacted. Nearly half of the sub-markets in Miami-Dade County had price appreciation on a per square foot basis quarter over quarter.

South Florida average per square foot valuation for retail property increased by 11.1 percent to $304 market wide in the 1Q of 2018.

Broward had year-over-year declines in retail transactions, square footage and dollar volume. Fort Lauderdale was Broward‘s only submarket with quarterly and annual growth in square footage transacted.

Palm Beach square footage transacted went down slightly but both transactions and dollar volume transacted increased on a quarterly basis.

Broward County Office Surges in Several Metrics in 1Q 2018

The Broward County office sector showed robust year-over-year growth in square footage and dollar volume. The sector posted 15 percent more office transactions than this time last year. The increase in sales volume led to a decline in per square foot valuations on an annual basis.

The Miami-Dade office market saw declines in transactions, square footage and dollar volume on an annual basis.

Palm Beach office also saw declines in all four metrics tracked by Vizzda. The Boynton Beach/Delray Beach is the submarket with highest per square foot valuation at $634 per square foot.

South Florida Posts More than 200 Industrial Transactions for the Fifth Consecutive Quarter

South Florida registered 213 industrial transactions in 1Q 2018, showing the continued strength of the market. South Florida is a top-tier U.S. industrial real estate market. New warehouses and distribution centers continue popping up throughout South Florida, adding jobs and boosting the economy.

The Miami-Dade industrial market saw the same number of transactions as the 4Q 2017 but saw declines in square footage and dollar volume transacted on an annual basis.

“While volume of industrial square footage declined in Miami-Dade, values did not,” Vizzda CEO Kris Thompson said. “This is indicative of an increased demand for a scarce supply. In layman’s terms, industrial properties in Miami-Dade are white hot.”

Broward saw a decline in industrial square footage transacted, number of transactions and dollar volume. Broward office’s first quarter of 2018 was the first quarter in which fewer than 1 million square feet of industrial property was transacted in more than a year.

The Palm Beach industrial market also saw declines on every metric other than transaction volume on an annual basis. The Green Acres/Palm Springs submarket grew its industrial transactions by double digits over the same period last year.

 

Source: WPJ