Tag Archive for: amazon

bar graph of 2022_174899951_s 770x320

Bigger is better when it comes to South Florida industrial leases.

Across Miami-Dade, Palm Beach and Broward counties, major retailers and shipping services like Target and FedEx leased 2.8 million square feet of industrial space in the largest leases of 2022, far outstripping last yearā€™s total of 2.2 million square feet.

Amazon was notably absent from this yearā€™s roundup of the top 10 leases. The e-commerce giant clinched three of the top 10 spotsĀ last year. In May, news broke that Amazon sought to sublease at leastĀ 10 million square feetĀ of its existing space ā€” a reversal from its pandemic-era practice ofĀ gobblingĀ up as much space as possible.

The average lease size of the top five leases this year came to 362,000 square feet, which is above last yearā€™s 258,530 square feet, but still belowĀ 2019ā€™s average of 449,000 square feet.

Hereā€™s a breakdown of the top five industrial leases signed this year in South Florida.

Imperial Bag & Co., Hialeah, 506K sf

Five out of the top 10 largest leases were inked for properties in Hialeah, with New Jersey-based Imperial Bag & Paper Co. (ImperialDade) taking the top spot, both inĀ HialeahĀ and overall. In the second quarter, company representatives signed a lease for 506,000 square feet at Countyline Corporate Park on Northwest 102nd Avenue in Hialeah. The company distributes janitorial supplies and food service packaging.

FedEx Ground Package System, Medley, 501K sf

FedEx leased 501,000 square feet in Medley in the first quarter. Itā€™s the only non-Hialeah lease in the top five. The shipping behemoth took over one of the warehouses at Miami 27 Business Park at 10300 Northwest 121st Way, according to published reports. FedEx has long been interested in South Florida industrial properties. Last year, Industrial Outdoor Ventures outbid FedEx for the 38.5-acre site at 3055 Burris Road in Miami. The winning bid wasĀ $64M.

FreezPak Logistics, Hialeah, 312K sf

FreezPak Logistics took this yearā€™s third largest lease at the same Countyline Corporate Park in Hialeah as Imperial Bag & Co. It signed a lease for 312,000 square feet inĀ March. This is the first South Florida location for the New Jersey-based cold and dry-storage provider.

World Electric/Sonepar, Hialeah, 267K sf

In the fourth spot, World Electric leased 266,760 square feet at Beacon Logistics Park at 4220 West 91st Place in Hialeah during the first quarter. A subsidiary of South Carolina-based Sonepar, North Miami Beach-based World Electric in September announced it inked a deal to acquire Advance Electrical to increase the companyā€™s presence in Atlanta. The company specializes in business-to-business electrical services and equipment.

All Florida Paper, Hialeah, 227K sf

Medley-based All Florida Paper signed the fifth largest lease of the year, during the third quarter. It took 227,700 square feet at Beacon Logistics Park at 4120 West 91st Place in Hialeah. All Florida Paper is a wholesale distributor founded in 1993, according to the companyā€™s website.

 

Source: The Real Deal

cold_canstockphoto2998525 770x320

For most of the last few years, Amazon has been the dominant force in South Florida’s industrial market, but theĀ e-commerce giant’s recent pullbackĀ hasn’t had a negative impact on the region’s warehouse market, industry insiders said atĀ Bisnow‘s South Florida Industrial Outlook event last week.

“The last few years it has all been Amazon, right? They were making 90% of that e-commerce growth. They were really bailing us out of all that space we could not lease,”Ā Bridge IndustrialĀ Vice President Aaron Hirschl said at the event. “Now itā€™s everybody else playing catch-up. It is 85% of all the e-commerce deals are other groups other than Amazon. Itā€™s really good to see that positive growth there.”

The vacancy rate for South Florida industrial properties dropped to 1.8% in the third quarter,Ā according to JLL research. Rents have grown 60% year-over-year, to an all-time record of $14.35 per SF. Construction is speeding up as a result:Ā So far in 2022, approximately 2.3M SF of new product has been delivered.Ā Over the next 18 months, JLL projects deliveries to hit 7.8M SF.

“Much of that is still fueled by e-commerce, even in the absence of the industry’s leader,” Prologis Vice President Jason Tenenbaum said at the event, held at the GalleryOne Fort Lauderdale by Hilton. “Iā€™d say e-commerce continues to be the predominant player, I am guessing in the majority of our portfolios, and thatā€™s notable particularly because of Amazonā€™s specific slowdown this year,” he said. “I would say the vast majority of our work is centered around that space.”

Tenenbaum said that he expects more leasing in the e-commerce space to come from third-party logistics companies as retailers themselves look to outsource their distribution. Those companies, called 3PLs, have accounted for more than 35% of all warehouse leasing in South Florida so far this year, according to a just published CBRE report.

ā€œI think as pricing and rents continue to rise and supply is constrained, you will see a lot more of all of our clients electing to 3PL their supply chain,” Tenenbaum said.

After e-commerce, the biggest driver of demand in the industrial market is in the food and beverage industry and their need for cold storage, developers at the event said. The global cold storage market was over $9.6B last year and is projected to reach $11.3B this year and hit $25.4B by 2027, according toĀ an October market report by Reportlinker.

ā€œIf you look at where the demand is the most nationally, clearly cold storage will be it,ā€Ā BBX Logistics Properties Mark LevyĀ said.Ā ā€œIn South Florida, if you look at the footprint of the market as a percentage of the total base, it’s a very, very small amount of cold storage space product that has been delivered.”

Tenenbaum said that the tourism industry in particular has been active in looking for cold storage properties, a piece of the market that had been largely absent for the previous two to three years.

“There was a time in the last 24 to 36 months where the tourism activity was way down. Now itā€™s back at a high pre-pandemic levels,” Tenenbaum said. ā€œAs tourism has come back and the cruise ships are set to sail again, thatā€™s a really active space.”

Levy said that while the cold storage market is “still tremendously undersupplied,” building the space on a speculative basis is still a rarity.Ā But Bridge Industrial launched a spec cold storage warehouse in Hialeah last year, and signed FreezePak to a 312K SF leaseĀ in March.

“I remember when Bridge was working on that development and we thought ā€˜Those guys are crazy! There is no way that they are going to get those rents,ā€™” Hirschl said. “And sure enough, they leased it out and knocked it out of the park. They proved a thesis and it was really cool to see it happen.”

Kroger, the largest grocery chain in the country, doesn’t have aĀ supermarketĀ in South Florida, but it opened a 60K SF warehouseĀ in Opa-Locka this yearĀ to start delivering groceries directly to customers’ homes. Kroger said in itsĀ September earnings reportĀ that its deliveryĀ sales grew byĀ 34% from the previous year.

ā€œKroger does not have any grocery stores here but they are renting near peopleā€™s homes,ā€Ā Hirschl said. “That trend is really interesting to see if they can really penetrate the market here.”

Butters Construction & Development Director of Acquisitions Adam Vaisman said onĀ a panel that, in addition to e-commerce and food and beverage companies, manufacturing is an increasing presence in the market. He said his firm signed a 200K SF lease with a manufacturing firm in Broward County and was getting ready to break ground.

“You will definitely see more of the manufacturing jobs, especially given our labor pool here in South Florida,” Vaisman said. “We are definitely starting to see that and I think that trend is starting to pick up if you continue to have global instability the way we do.”

But while manufacturers and cold storage providers largely need specialized space,Ā e-commerce users are taking any space they can get in a market with soaring rents and sub-2% vacancy.

ā€œLocation is the most important always, so for e-commerce users, if they canā€™t find a new building and itā€™s a market they need to be in, they will make it work with a Class-B space or a Class-C space,ā€ said Seagis Property Group Vice President of Florida Acquisitions and Leasing Bradlee Lord. ā€œPublic transportation will only get increasingly worse as the population grows. With Covid in 2020, the roads were still relatively busy. Location matters as congestion gets worse.ā€

 

Source: Bisnow