2019 Edition – South Florida Industrial Market Outlook
“Demand has consistently exceeded the level of new supply for several years, leading to single-digit vacancy across Miami, and developers are responding to meet this need.”
SOUTH FLORIDA is one of the state’s most important economic drivers. The region generates more than one-third of the state’s GDP through trade, tourism, international business and finance, healthcare and education.
And every one of these industries has an impact on real estate. When businesses require more workers, the demand for retail and housing increases. When those businesses expand, the need for office or warehouse space to house goods or workers also grows. And, of course, everything from cars to machinery, produce to appliances, and home furnishings to clothing, needs to be stored and shipped as efficiently as possible.
South Florida’s economic growth and the interconnectedness of its industries has created a cycle of growth that is very nearly self-sustaining. As any sector expands, other sectors grow to meet the need, and this in turn leads back to more growth in those same sectors. As an example, when businesses grow and hire more workers, the need for housing, office retail space, and industrial real estate rises, and as those workers have more buying power, businesses grow to meet that expanding need.
Today this means that South Florida is experiencing an increasing demand for state-of-the-art facilities in accessible locations to serve businesses and consumers. This has created a need for more institutional-grade product, which then creates opportunities for investors and developers. The timing has indeed never been better to do business in South Florida.
SOUTH FLORIDA is one of the most populous areas in the United States, with Miami-Dade ranking seventh among counties in the nation. Moreover, this area is unique among major American cities, with one of the most diverse population of any American metro. More than half of Miami’s population is foreign-born, which is the highest level in the nation. This gives South Florida an international feel that few American cities can match.
The area’s population and economic benefit from a strong focus on education, with numerous colleges and universities to support a population where more than 40% have an associate’s degree or higher. This diverse and well-educated population contributes to a strong workforce and a stable consumer base, with home values and incomes that are consistent with or above national trends. And over the past several years, population growth has been strong even as unemployment rates have dropped.
MIAMI-DADE COUNTY’S unemployment rate holds steady at its lowest level in more than a decade, with job growth robust in the logistics, construction, and manufacturing sectors. Moody’s Analytics predicts that Miami’s economic growth will continue in the short term but cautions that global factors could have an impact in the coming year.
BROWARD COUNTY has also seen healthy job growth in recent years, though growth slowed over the summer. Wage growth has also slowed of the late but still exceeds the state’s average rate. Port Everglades enjoyed record activity in 2018, and global trade and shipping remain strong. Trade and travel, both through the airport and Port Everglades, will continue to propel the local economy over the long term.
Trade / Transportation / Utilities: 624,772 jobs,
Business / Professional: 561,148 jobs,
Education / Healthcare: 437,955 jobs,
Leisure / Hospitality: 341,965 jobs,
Goverment: 325,934 jobs,
Construction: 182,442 jobs,
Other: 166,472 jobs,
Manufacturing: 118,909 jobs,
Finance / Insurance: 122,472 jobs,
Information: 51,112 jobs.
TOURISM is second only to trade in contributing to South Florida’s growth and, as with intermational trade, South Florida is the primary gateway to and from Latin America. PortMiami and Port Everglades are the top two cruise ports in the world, and Miami and Ft. Lauderdale airports offer a large number of domestic and international flights in and out of the area. These rich resources make South Florida a preeminent destination and transit point for tourists from all aver the Wertern Hemisphere, which strenghtens the local economy and culture.
South Florida is also a major holiday destination due to its stellar beaches, active nightlife and sporting events. Even if they are simply passing through, tourists often stay overnight in Miami hotels and spend money on shopping, dining, and entertainment
Foodie: Miami ranks #3 best foodie city in America,
Nightlife: Miami ranks #1 in “Best cities to visit in America for a great nightlife”,
Golf: Florida has more golf courses than any other state totaling 1,250,
Boating: Fort Lauderdale/Miami rank #2 “Great boating destination in Florida”,
Cruise: PortMiami and Port Everglades ranked #1 & #3 as busiest cruise ports.
New constructions – Industrials
SOUTH FLORIDA continues to see significant industrial development activity, driven by an appetite for state-of-the-art facilities. Miami saw more than 3.0 million SF of new deliveries in each of the past two years, a recent peak. At the end of Q3, more than 2.1 million SF have been completed to date in 2019, with another 3.1 million SF under construction, indicating another record year for new deliveries. Most of the new construction is focused in the North Miami Beach and medley submarkets, with smaller projects in other submarkets. Nearly 42% of the product currently under construction has already been leased, but given current demand more is likely to be committed prior to delivery.
Following the delivery of 2.0 million SF of new space in 2018 (the highiest annual seen in a decade), the Broward market has already surpassed that in the first nine months of 2019. Another 2.5 milion SF are under construction, with just under half of that due by the end of 2019. This means that 2019 will break last year’s record for square feet completed. Nearly every submarkethas at least one project underway, and only 15% of the space under construction has been leased to date. Unless that space is leased in the next few months this will likely lead to a further rise in vacancy in 2020.
Source : TransWestern