In mid-October Bridge Development Partners closed a deal to build close to 1 million square feet of … [+]
Avison Young
Two recent deals near Hialeah in Miami-Dade County highlight developers’ voracious appetite for industrial deals in South Florida. Foundry Commercial acquired an 18-acre site in Hialeah Gardens near the Florida Turnpike where the real estate company is planning a speculative industrial project that could total 320,000 square feet. And Bridge Development Partners closed a deal for a 123-acre tract on the west side of Opa-Locka Airport in east Hialeah where the firm is going to build 1 million square feet of industrial space consisting of four buildings ranging from 109,000 to 500,000 square feet each.
Both transactions were handled by Avison Young, which recently released its Q3 2019 industrial report showing a significant jump in industrial sales in Miami-Dade and Broward counties. For the 12 months ending in September, Broward industrial sales totaled $774.9 million, an 84% leap compared to the same time period in 2018. “Investors continue to be attracted to Broward’s industrial market due to the convenience of its centralized location, consistently low vacancies, and robust port activity,” the report states. “Of the total industrial investment sales for the year-to-date, 50.7% were to institutional investors, up from 45.1% during the same period in 2018.”
After experiencing a slight lag in investment sales volume in Q2 2019, the Miami-Dade market bounced back in Q3, Avison Young found. Investment sales volume totaled $1.26 billion for the 12 months ending in September, representing an 18.5% increase compared to the same period last year. During the quarter, Miami-Dade recorded the largest industrial sale of the year for the entire state of Florida. RREEF bought Centergate at Gratigny, an industrial park consisting of three buildings, for $178 million, or $112 a square foot. In 2015, the largest of the three buildings traded for $78 million, or $80 a square foot.
“Healthy economic growth, bustling port activity, and positive demand continue to drive industrial investment and development activity in Miami’s land-constrained market,” said Bobby Benton of Avison Young.
Fueling sales is the strong demand from industrial tenants. In Broward, the overall vacancy rate remains below 4.0% despite 1.9 million square feet of new industrial space delivered this year. In Miami-Dade, the vacancy rate rose slightly to 3.41% in Q3 as absorption of new speculative space slowed down a bit. Since 2018, the county’s industrial market has leased 83 percent of 6.8 million of speculative development under construction.