The Industrial Market Has Still a Lot to Gain
Propelled by population growth and consumer demand for goods, Miami’s industrial sector continues to strengthen, as reported by Miami Today. I recently discussed the state of the industrial market with Miami Today reporter Catherine Lackner as she reported on one of the top-performing assets in the current real estate cycle in South Florida.
The redevelopment and repositioning of traditionally industrial neighborhoods such as Wynwood, the Design District, Midtown and Little River has tightened the market and generated a scarcity of industrial-use land. Westward, few properties are available for industrial use while east of I-95, in the vicinity of the Golden Glades interchange, we’re seeing purchasing and redevelopment of sites that provide expressway access. As the demand for industrial land increases, any landowner with the staying power to carry it will survive in the short and long-term and any well-located parcel will trade well. The reality is that we are running out of land in South Florida and the steady demand for industrial land is raising prices.
In addition, e-commerce is increasingly impacting pricing, especially in areas close to urban population centers. Amazon, for example, recently broke ground on an 885,000-square-foot fulfillment center in Opa-Locka, strategically placing the e-commerce retailer in the center of one of the largest U.S. markets. The development of last-mile delivery in the e- commerce sector now meets the demands of urban and suburban customers for next-day delivery, while the recent purchase of Whole Foods requires Amazon to deliver fresh and packaged food quickly and on schedule. This is further proof that, no matter the strength of the online sector, companies such as Amazon require a retail footprint and industrial space to stock and deliver the products purchased.
Miami’s strong market fundamentals continue to attract institutional owners and land values are under pressure. According to the Miami Today article, significant industrial interest and activity is occurring in western portions of Miami-Dade County such as Hialeah Gardens, Medley and Doral.
My conclusion: Unless we see a significant amount of new construction in the industrial market delivered quickly, prices are expected to continue in an upward trajectory.
You can read the Miami Today article here