Industrial demand remains strong in Miami Dade, and in West Dade in particular, which is the traditional “ground zero” for industrial use. That’s coming from Ford Gibson, managing director at Foundry Commercial.
Foundry just picked up a mega industrial complex in Miami. His firm is active in the region. Last year, Foundry entered in what its calling an “historic joint venture” that aims to improve the quality of life for South Florida residents. The firm partnered with Miami-based charitable organization Carrie Meek Foundation on a ground lease for a speculative $150 million industrial project in Miami-Dade County.
“After 2017 deliveries, only South Florida Logistics Center and Beacon Lakes will have remaining developable land, totaling 1.4 million square feet of additional product, the bulk of which is expected to be delivered and leased within the next 12 to 18 months,” Gibson tells GlobeSt.com. “This means development has moved to North West Miami Dade in areas such as Miami Lake, Haleigh, Medley and Opa Locka.”
By Ford’s estimates, if you look at these large developable tracks of land, there is less than 7 million square feet of potential development of new product. He says this is forcing developers to look at redevelop opportunities or smaller site acquisitions.
“With an average absorption rate of well over 2 million square feet a year and vacancies at less than 5% overall and around 2% for class A space, production rents are expected to rise,” Gibson says. “The issue of supply is going to be further complicated due to the potential development of the ‘mega mall’ known as Dream Mall in Northwest Miami-Dade, along the Turnpike and I-75.”
As Gibson sees it, this will create a situation where some of the previously mentioned square footage of potential supply will fall out of the industrial inventory and move to office or residential. His conclusion: All this demand has led some developers to wonder if an untapped market for industrial, such as the Homestead area, may see industrial development pick-up for tenants who are not dependent on the port or airport.