Summary of the 2012 CIASF Industrial Market Report

Sofitel Hotel – Jan 13th, 2012

This is the 16th year that Tom Dixon with help from Ed Lyden and more recently, his son, Andrew, have put together this report.  It is by far the most complete report out there for the Miami Market and far better than one I went to in Raleigh, NC where I was given two sheets of black and white photocopied paper.

I will just give a quick overview without going into the submarkets. 

Here is the report      CIASF_2012-Industrial-Report

Again, good job Tom and a “Tip of the Hat” to you sir.

Industrial Supply:  Supply is up another 1.328M SF from 2009 to 175,131,000 SF.  I thought the market was over 200,000,000 SF so I wonder if all SF under 10,000 SF is excluded.  There is no data for 2011.

Industrial Employmet:  Down about 24,000 since 2007 but flat from last year at 161,500.  The major losses are in manufacturing (13,000) and Wholesale trading (11,000).  Trucking and warehouse has remained relatively flat (Remember that when selecting a tenant).

Freight:  About 2,000,000 tons a year flow through MIA.  With 2009 dropping down 370,000 tons with 2011 looking like it may drop by 250,000 tons from the norm.  The Port is another story with volume up by about 1,000,000 tons from the norm to 8,230,000 tons.  As expected, TEUs (Twenty-foot Equivalent Units) are also up over 900,000.  Surpassing the 2007 peak.  Go to www.miamidade.gov/portofmiami to get more stats and to read about the Port Expansion.

Sub Markets:  The report divides the county into seven submarkets:  Airport West, Hialeah, NW/Medley, Central, North, Bird/Tamiami, South.  One of the challenges of this method is trying to get meaningful information.  For example, Airport-west has somewhat similar product types.  Whereas submarkets such as Hialeah and Birt/Tamiami show vacancy rates from 5-25%.  The report notes the reason for this.

Sales Transactions: No surprise; transaction volume is down to 79 transactions (-45% from 2007 peak).  However sales volume is up slightly from last year with an avg price psf of $55 PSF (-35% from 2007 peak).  Warehouse Condos followed a similar pattern.  Some submarkets faired better than others.  There is a great graph on page 4 of the report that shows the PSF in each submarket since 1997. 

Rental Rates:  Rental Rates hit a peak in all submarkets in 2008.  From the 1999 to 2008 rates double in most submarkets.  Central Miami and South Miami had the largest gains.  Airport West has recovered the quickest.

Vacancy rates:  From a low of 4% in 2007, the market shot up to a 16% vacancy in 2011.  2012 saw somewhat of a recovery to about 10%.  The historical norm is in the 7-8% range. 

Summary

  • South Florida leads the nation with newer product out-performing older obsolete buildings.
  • South America bolstering the Miami Market
  • Tenants locking in long term lower rates.
  • Class A buildings purchased at low caps by institutions.
  • Financing Continues to be an issue
  • Thre major Government projects under way – Miami Tunnel, Intermodal Center, and 826/836 Interchange all underway adding jobs and occupancy to the central and Airport West Submarkets.

To keep up-to date on Road Construction go to:  http://www.fdotmiamidade.com/

If you are leaving the office and want to see if I-95 or 836 is backed up go to these real time cameras and see for yourself:

http://www.sunguide.org/sunguide/index.php/travel_info/

Market Reports

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