Market Statistics for Miami Industrial Real Estate - Q1 2016
The first quarter of 2016 showed strong numbers for the industrial real estate market in Miami. Vacancy rate decreased to 4.5% from 4.7% in the fourth quarter of 2015 and 5.2 % in the first quarter of 2015. During this quarter, there was a net absorption of 586,062 Sq. Ft. down from 961,428 Sq. Ft. in the fourth quarter of 2015 and 1,416,658 compared to the first quarter of 2015. The chart below show the changes.
The drop in vacancy rate shows there are fewer spaces available in the market; however, the lower trend in net absorption signals that less space has been absorbed compared to past quarters. Still, the lack of functional space available pushed the average lease rate to $9.24/ Sq.Ft. industrial gross, up from $9.02/ Sq.Ft. in the fourth quarter of 2015 and $8.53/Sq.Ft. in the first quarter of 2015.
Delivery of new construction remains steady, although at a slower pace. In the first quarter of 2016, there were 406,362 Sq. Ft. of new construction delivered to the market. This number is down from 459, 805 Sq. Ft. delivered in the fourth quarter of 2015 and 609,194 Sq.Ft. delivered in the first quarter of 2015. This strong demand for warehouse space in Miami has attracted new development to the market. At the end of the first quarter of 2016, there were 2,405,232 Sq.Ft. under construction; the most since 2007. All this new construction increased the total inventory of industrial space in Miami to 233,719,623 Sq. Ft. on 8,871 buildings.
Sales transactions for Industrial buildings in Miami decreased in the first quarter of 2016. This quarter saw 22 sale transactions for a volume of $61,787,900 totaling 1,123,071 Sq.Ft. This is down from 29 transactions with a volume of $109,850,000 totaling 1,254,154 Sq. Ft. in the fourth quarter of 2015. Also down from the first quarter of 2015 where 35 buildings sold with a volume of $228,963,300 totaling 2,448,548 Sq. Ft. This decrease can be attributed to two things happening in the market: First, the sharp decline in inventory of buildings for sale. Second, the increase on prices for buildings available for sale.
As we move through the second quarter, the market is expected to continue its strong rhythm and post a positive net absorption. As a benchmark, the second quarter of 2015 experienced a net absorption of 959,898 Sq. Ft. and average lease rate stood at $ 8.62/ Sq. Ft.
Miami’s economy continues to be affected by the slowdown in Latin America and the stronger dollar. However, a new wind of weaker dollar is expected to provide breathing room to these economies and give them higher purchasing power for properties in Miami. Additionally, the lifting of the Embargo in Cuba is expected to bring demand for space, as materials for rebuilding the island will most likely be transported through Miami.
For more information and other market statistics, contact the Miami Industrial Team at 786-433-2380.