Demand for Class A industrial space in South Florida has never been stronger. With a record-low vacancy of 4.6% in Miami-Dade County, developers are on a building spree: more than 300,000 square feet of new industrial product hit the Miami market in the first half of 2014, another 1.3 million is under construction and still 3 million more is in the pipeline.
So what’s driving all of this demand?
According to the latest report from CBRE Group, Inc., Transportation Cost Equivalence Line: East Coast vs. West Coast Ports, industrial users want to be where the people are – and the people are coming to South Florida.
The need for high-speed, cost-efficient delivery is up-ending traditional supply chain models, prompting many companies to relocate distribution and fulfillment centers from low-cost, small market areas to port cities near large population centers, i.e. “megapolitan” areas. According to the CBRE report. South Florida is one of 20 U.S. markets characterized as a “megapolitan” area based on projected population growth and strength of the transportation infrastructure.
Indeed, Florida’s population is growing faster than the national average – the state will soon eclipse New York as the third-most populous state in the country. South Florida’s population is expected to increase by 2.4 million people, or 29%, between 2013 and 2030, according to projections by the Florida Bureau of Economic and Business Research. Central and North Florida population is growing even faster.
Significant and ongoing investment in South Florida’s seaports, airports and intermodal transportation infrastructure is also giving investors and businesses confidence in the long-term growth of the region.
In the past few months, we’ve seen a noticeable uptick in large users (over 100,000 SF) seeking Class A industrial product in South Florida, and all signs indicate that this is just the beginning.
By: Ken Krasnow
Managing Director | CBRE South Florida
Ken Krasnow is the Managing Director for CBRE’s South Florida offices. In 2013, his region executed over 1000 transactions – 175 sales, and 825 leases – with an aggregate value exceeding $2.8 billion. In addition, CBRE South Florida completed over 1,400 valuation and advisory assignments and $600 million in loan originations.
Follow CBRE on Twitter: @cbre_Florida
Want real estate news on-the-go? Download our NEW mobile app today!