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MARKET VIEW | INDUSTRIAL | SOUTH FLORIDA MIAMI-DADE | BROWARD | PALM BEACH

Q4 2017

ONE COMMERCIAL REAL ESTATE | MIAMI-DADE | RETAIL | Q4 2017


INDUSTRIAL DEVELOPMENT IN

MARKET TRENDS

MIAMI BOOMING WITH RENTS AT

Q4 2017 INDUSTRIAL REPORT

RECORD HIGHS

EXECUTIVE SUMMARY The Miami Industrial market continues to experience strong development volume with sinking vacancies and stagnating rental rates. In the last quarter, rental rates hovering around $9.75 per SF. At the same time, vacancies decreased by 12 basis-points, while absorption rates were increasing to 449.713 SF. Construction in the industrial segment is currently 5.08 million SF, with 2.05 million SF being delivered in the next quarter. The area with the highest activity is Medley with over 2 million SF under construction.

OUTLOOK Miami’s industrial market is driven by strong economic growth and has developed to an international hub for goods and services entering and leaving the United States. New class A industrial space is scarce within Miami and is thought after by tenants as investors. Developers have responded by significantly increasing industrial development activity over the past year. In the next quarter about 2.05 million SF are being delivered. Temporarily this will yield into a slight uptick in vacancy and rental rates.

VACANCY

NET ABSORPTION SF

CONSTRUCTION SF

COMPLETIONS SF

Q4 2017

Q3 2017

FORECAST

4.00%

i

h

449,713

h

h

5,084,198

h

i

267,769

i

h

9.76

g

h

GROSS LEASE RATE

RELATIVE TO PRIOR PERIOD | SOURCE: COSTAR PROPERTY®

ECONOMIC OVERVIEW 1 YR CHANGE

Q4 2017

CHANGE

UNEMPLOYMENT RATE

4.6%

- 16.4%

POPULATION GROWTH

2,770,020

+ 1.41%

MEDIAN HOUSEHOLD INCOME

47,346

+ 2.36%

LABOR FORCE

1,181,950

+ 1.31%

CHANGE AS PER YEAR-TO-DATE | SOURCE: US DEPARTMENT OF LABOR STATISTICS

MARKET ACTIVITY About 449,713 SF of industrial space were absorbed in the past quarter and 267,769 SF of new supply added to the market. Miami’s vacancy dropped slightly to 4.00% from the previous period with asking rents stagnating around to $9.75 per SF. The booming e-commerce sector is merging industrial and retail landscapes and creating a need for regional distribution centers. Providing on-demand delivery has caused the industrial market to become the greatest beneficiary of challenges in the retail sector. In combination with a growing population and increasing local demand, industrial rents and new construction are propelling in Miami-Dade. The Port Miami is crucial to the local consumption and in many cases the Miami area is the destination for cargo shipped through the ports. Recently the Port Miami completed its expansion and dredging project and now has the capacity to accommodate Super-Post-Panamax ships and some of the largest cargo ships travelling from the East. With the advances in transportation through Port Miami, fresher agricultural produce will be processed and stored locally. This will lead to an increase in demand for storage space and coolers. Some areas, which have traditionally been industrial areas such as the Central East and Bird Rd Market are undergoing a major shift to more retail/entertainment oriented activities. This transformation results in a significant increase in sale prices and rental rates. As this occurs, industrial activity is forced to move to less expensive locations.

20

ONE COMMERCIAL REAL ESTATE | MIAMI-DADE | INDUSTRIAL | Q4 2017


Currently there are about 5.08 million SF under construction. The largest project under development is a new 836,292 SF Amazon fulfillment center located in the Carrie Meek International Business Park in proximity to Opa-Locka Executive Airport. The project is expected to create 1,000 and will be Amazon largest facility in South Florida by the end of 2018. Another notable development is the $250 million 467,000 SF new headquarter of NBC Universal Telemundo in the Miami Airport Area. Completion is expected for the 2nd quarter of 2018. The new headquarter is expected to add another 150 new jobs, with an average salary of $89,000. Miami experienced $313.5 million in sales in the 4th quarter of 2017. The largest transaction marked the acquisition of Miami Free Zone by Foundry Commercial for a total of $85.5 million. Being in a free trade zone allows tenants to sell goods while avoiding duties. That is a valuable designation for manufacturers. The transaction included a 823,000 SF industrial complex and 18 acres of land, where Foundry plans to build another 300,000 SF of industrial space.

COMPLETIONS, ABSORPTION AND VACANCY TRENDS COMPLETIONS

ABSORBTION

VACANCY

SOURCE: COSTAR PROPERTY®

1.6M

7.00%

1.4M

6.00%

1.2M

5.00%

1M

4.00%

800K

3.00%

600K

2.00%

400K

1.00% 0.00%

200K

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

AVERAGE ASKING RENTS TRENDS FLEX

WAREHOUSE

OVERALL

SOURCE: COSTAR PROPERTY®

35

30

25

20

15

10

5

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

PRICE TRENDS CAP RATE

$/SF

SOURCE: REAL CAPITAL ANALYTICS

150

7.50%

140

7.00%

130

6.50%

120

6.00%

100

5.50%

90

5.00% 4.50%

80 70

4.00% Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2014

21 ONE COMMERCIAL REAL ESTATE | MIAMI-DADE | INDUSTRIAL | Q4 2017


INDUSTRIAL STATISTICS SUBMARKET

TYPE

TOTAL INVENTORY

VACANCY (%)

(SF)

YTD NET ABSORBTION

YTD DELIVERIES UNDER CONSTRUCTION GROSS LEASE RATES

(SF)

(SF)

(SF)

Central Miami

Total

3,292,874

3.95%

(20,062)

-

9,876

9.88

Warehouse

3,240,537

3.56%

(5,491)

-

9,876

9.70

Flex

52,337

27.84%

(14,571)

-

-

14.54

East Miami

Total

4,312,826

7.21%

(22,632)

19,374

-

17.30

Warehouse

4,095,088

6.81%

(26,132)

19,374

-

16.93

Flex

217,738

14.69%

3,500

-

-

21.50

Hialeah

Total

30,907,041

2.85%

(161,435)

-

77,860

7.28

Warehouse

30,572,505

2.88%

(160,435)

-

77,860

7.27

Flex

334,536

0.30%

(1,000)

-

-

18.00

Medley

Total

35,652,989

6.33%

860,351

2,042,116

556,090

9.11

Warehouse

34,759,920

6.45%

851,225

2,042,116

556,090

9.08

Flex

893,069

1.57%

9,126

-

-

14.72

Miami Airport East

Total

21,599,119

4.70%

(190,007)

162,837

168,693

10.05

Warehouse

20,273,247

3.54%

(5,043)

162,837

168,693

9.45

Flex

1,325,872

22.36%

(184,964)

-

-

16.94

Miami Airport North

Total

12,675,222

1.45%

226,483

-

200,000

9.57

Warehouse

11,375,618

1.61%

206,163

-

200,000

9.34

Flex

1,299,604

0.00%

20,320

-

-

13.50

Miami Airport West

Total

44,991,265

3.42%

585,530

533,322

801,663

10.81

Warehouse

39,138,436

3.55%

624,823

533,322

801,663

10.23

Flex

5,852,829

2.56%

(39,293)

-

-

19.72

Miami Lakes

Total

12,146,283

4.00%

270,309

-

99,130

8.42

Warehouse

10,677,720

3.55%

271,679

-

99,130

8.26

Flex

1,468,563

7.32%

(1,370)

-

-

9.90

North Miami Beach

Total

37,096,878

3.96%

(11,945)

602,888

1,382,440

8.58

Warehouse

35,409,712

3.77%

4,347

602,888

1,382,440

8.40

Flex

1,687,166

7.87%

(16,292)

-

-

13.15

Outlying-Miami Dade

Total

229,685

0.00%

-

-

1,770,477

6.98

Warehouse

229,685

0.00%

-

-

1,770,477

6.98

Flex

-

0.00%

-

-

-

-

South Central Miami

Total

13,348,404

7.02%

97,515

-

-

21.34

Warehouse

12,702,117

7.30%

74,497

-

-

20.13

Flex

646,287

1.49%

23,018

-

-

31.58

South Dixie Hwy

Total

8,954,540

2.48%

185,452

270,706

-

10.56

Warehouse

8,123,802

2.62%

182,248

270,706

-

10.41

Flex

830,738

1.16%

3,204

-

-

13.58

Southwest Dade

Total

10,108,633

0.86%

94,685

25,387

17,969

11.70

Warehouse

8,325,040

0.81%

91,175

25,387

17,969

11.58

Flex

1,783,593

1.13%

3,510

-

-

12.23

West Miami/Coral Ter

Total

4,653,299

1.59%

(36,212)

-

-

14.72

Warehouse

4,298,724

1.10%

(29,212)

-

-

14.86

Flex

354,575

7.52%

(7,000)

-

-

14.18

Total

239,969,058

4.00%

1,878,032

3,656,630

5,084,198

9.76

Warehouse

223,222,151

3.93%

2,079,844

3,656,630

5,084,198

9.43

Flex

16,746,907

4.86%

(201,812)

-

-

16.56

Source: CoStar Property®

g ONE COMMERCIAL REAL ESTATE | MIAMI-DADE | INDUSTRIAL | Q4 2017


SIGNIFICANT LEASE TRANSACTIONS PROPERTY ADDRESS

TENANT NAME

SIZE

LEASE TYPE

LEASE RATE

1462.-14660 NW 60th Ave

Nutri Force Nutrients Inc

120,000

Direct

Miami Lakes

6695-6699 NW 36th Ave

Ross Furniture

114,000

Direct

Hialeah

8400 NW 25th St

DHL

100,044

Direct

Miami Airport West

2000 NW 62nd Ave

Avianca

78,380

Direct

Miami Airport East

1775 NW 70th Ave

Apollo

74,718

Direct

Miami Airport East

$5.75 IG

SUBMARKET

SIGNIFICANT SALES TRANSACTIONS PROPERTY ADDRESS

BUYER NAME

SIZE

SALES PRICE $

$/SF

SUBMARKET

Miami Free Zone

Foundry Commercial

PepsiCo

Terra Group

850,000

85,500,000

101

Airport West

232,919

40,268,000

173

164 W 31st Place

Doral

COFE Properties

372,136

32,500,000

87

Hialeah

Iron Mountain

CenterPoint Properties

129,098

17,500,000

136

West Miami

501 NE 183rd SSt

Mandich Group

133,651

9,625,000

72

North Miami Beach

MAJOR DEVELOPMENT PIPELINE PROPERTY ADDRESS

COMPLETION

SIZE

DEVELOPER

SUBMARKET

14000 NW 37th St

Q4 2018

836,292

Amazon

Opa-Locka

Telemundo Building

Q2 2018

467,000

NBC Universal Telemundo

Miami Airport

County Line Corportate Park

Q1 2018

325,000

Flagler Real Estate Services

Hialeah

Airside 2

Q4 2018

259,284

N/A

Opa-Locka

Airside 2

q1 2018

253,316

N/A

Opa-Locka

ONE COMMERCIAL REAL ESTATE | MIAMI-DADE | RETAIL | Q4 2017


BROWARD’S INDUSTRIAL

MARKET TRENDS

CONSTRUCTION IS ROARING WHILE

Q4 2017 INDUSTRIAL REPORT

RENTS ARE SKYROCKETING

EXECUTIVE SUMMARY VACANCY

The Broward Industrial market continues to experience strong development volume with rising leasing rates and sinking vacancies. Development especially in SW Broward and Pompano are booming as they mark significant growth markets. In the last quarter, rental rates increased by 1.23% to $9.88 per SF. At the same time, vacancies decreased by 19 basispoints, while absorption rates were increasing to 264,171 SF. Construction in the industrial segment is currently 1.46 million SF, with 823,444 SF being delivered in the next quarter.

OUTLOOK Broward’s industrial market is mainly driven by the strong job growth. As vacancy rates reach record lows there is need for new prime industrial developments within the region. Broward will experience a massive supply of 823,444 square foot, largely speculative industrial space. Temporarily, this will lead to a relaxation in the rental market and cause vacancies to uptick slightly.

NET ABSORPTION SF

CONSTRUCTION SF

COMPLETIONS SF

Q4 2017

Q3 2017

FORECAST

3.54%

i

h

353,469

h

h

1,465,271

i

i

264,171

h

h

9.88

h

h

GROSS LEASE RATE

RELATIVE TO PRIOR PERIOD | SOURCE: COSTAR PROPERTY®

ECONOMIC OVERVIEW 1 YR CHANGE

Q4 2017

CHANGE

UNEMPLOYMENT RATE

3.3%

- 25.0%

POPULATION GROWTH

1,961,000

+ 1.82%

MEDIAN HOUSEHOLD INCOME

58,562

+ 3.81%

LABOR FORCE

848,350

+ 2.20%

CHANGE AS PER YEAR-TO-DATE | SOURCE: US DEPARTMENT OF LABOR STATISTICS

MARKET ACTIVITY About 353,469 SF of industrial space were absorbed in the past quarter and 264,171 SF of new supply added to the market. Broward’s vacancy dropped slightly to 3.54% from the previous period with asking rents increasing by 1.23% to $9.88 per SF. The booming e-commerce sector is merging industrial and retail landscapes and creating a need for regional distribution centers. Providing on-demand delivery has caused the industrial market to become the greatest beneficiary of challenges in the retail segment. In combination with a growing population and increasing local demand industrial rents and new construction are propelling in Broward. Port Everglades takes a crucial role in the Broward industrial market as it is one of the most active containerized cargo ports in the U.S. and serves as South Florida’s main seaport for petroleum products. Broward’s industrial market is also benefiting from the areas uninterrupted job growth. Jobs went up 1.8% year on year, with unemployment rates dropping to 3.8%. The manufacturing industry expanded by 2.9%, which is above the nationwide average of 1.1%. Demand for industrial space is driven by a diverse cross-section of industries such as pharmaceutical, logistics, food & beverage, and manufacturing.

ONE COMMERCIAL REAL ESTATE | BROWARD | INDUSTRIAL | Q4 2017


Currently there are about 1.46 million SF under construction. Core5 Industrial Partners and Helms Development are currently developing a 224,572 SF distribution center in Pembroke Pines, which is scheduled for delivery by the first quarter of 2018. The facility is part of a larger three-building scheme, which was broken out in phases and is ought to be deliver a total of 750,000 SF of class A space. Exeter Property Group is currently delivering a 212,160 SF industrial space in Sawgrass Bend Commerce Center, which is the first phase of a twobuilding development of equal size. The building is located next to Exeter’s already existing two warehouses in the park. The project is scheduled for the end of 2018. Broward County experienced $179.6 million in sales in the 4th quarter of 2017. The largest transaction marked the acquisition of a USPS facility in Pembroke Pines, which was acquired by Terra for a total of 23.5 million. Pembroke Pines had purchased the property from the U.S. Post Office for $17.88 million only three months ago, and quickly flipped it for a neat profit.

COMPLETIONS, ABSORPTION AND VACANCY TRENDS COMPLETIONS

ABSORBTION

VACANCY

SOURCE: COSTAR PROPERTY®

700K

6.00%

600K

5.00%

500K

4.00%

400K 3.00%

300K

2.00%

200K

1.00%

100K 0

0.00%

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

AVERAGE ASKING RENTS TRENDS GENERAL RETAIL

MALL

SHOPPING CENTER

TOTAL

SOURCE: COSTAR PROPERTY®

30

25

20

15

10

5

0

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

PRICE TRENDS CAP RATE

$/SF

SOURCE: REAL CAPITAL ANALYTICS

130

8.00%

120

7.50%

110

7.00%

100 6.50%

90

6.00%

80 70

5.50%

60

5.00% Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

ONE COMMERCIAL REAL ESTATE | BROWARD | INDUSTRIAL | Q4 2017

Q4 2014


INDUSTRIAL STATISTICS SUBMARKET

TYPE

TOTAL INVENTORY (SF)

VACANCY (%)

YTD NET ABSORBTION (SF)

(SF)

(SF)

Central Broward

Total

20,602,628

2.97%

368,203

321,465

54,791

10.74

Warehouse

17,942,640

2.89%

317,010

321,465

-

10.35

Flex

2,659,988

3.53%

51,193

-

54,791

13.73

Coral Springs

Total

6,654,149

5.49%

(43,877)

-

426,536

7.75

Warehouse

5,542,649

6.10%

(117,032)

-

426,536

7.53

Flex

1,111,500

2.41%

73,155

-

-

11.71

Northeast Broward

Total

12,818,625

3.08%

226,866

-

37,050

10.36

Warehouse

11,358,930

2.49%

254,763

-

37,050

9.25

Flex

1,459,695

7.60%

(27,897)

-

-

14.47

Outlying Broward

Total

42,248

6.47%

(2,734)

-

-

15.95

Warehouse

5,861

0.00%

-

-

-

-

Flex

36,387

7.51%

(2,734)

-

-

15.95

Pompano Beach

Total

30,649,596

2.52%

(50,105)

-

344,997

9.35

Warehouse

27,242,228

2.50%

(55,669)

-

344,997

8.89

Flex

3,407,368

2.69%

5,564

-

-

11.85

Southeast Broward

Total

30,247,682

1.63%

455,156

30,000

40,000

11.21

Warehouse

25,863,766

1.51%

434,390

30,000

40,000

10.64

Flex

4,383,916

2.33%

20,766

-

-

16.31

Southwest Broward

Total

17,804,693

7.81%

255,544

195,024

541,897

9.60

Warehouse

14,037,022

7.08%

329,568

37,270

541,897

8.51

Flex

3,767,671

10.52%

(74,024)

157,754

-

14.19

West Sunrise

Total

9,836,904

5.32%

23,642

-

20,000

9.64

Warehouse

7,061,215

5.55%

34,979

-

20,000

8.90

Flex

2,775,689

4.73%

(11,337)

-

-

12.59

Total

128,656,525

3.54%

1,232,695

546,489

1,465,271

9.88

Warehouse

109,054,311

3.30%

1,198,009

388,735

1,410,480

9.20

Flex

19,602,214

4.87%

34,686

157,754

54,791

13.70

Source: CoStar Property® ONE COMMERCIAL REAL ESTATE | BROWARD | INDUSTRIAL | Q4 2017

YTD DELIVERIES UNDER CONSTRUCTION GROSS LEASE RATE


SIGNIFICANT LEASE TRANSACTIONS PROPERTY ADDRESS

TENANT NAME

9571-9591 Premier Pky

N/A

SIZE

LEASE TYPE

LEASE RATE

SUBMARKET

51,230

Direct

$9.25 IG

Miramar

801 Shotgun Rd

51,030

Direct

$13.00 IG

Sunrise

605 SW 16th Ter

38,458

Direct

$6.50 NNN Pompano Beach

2200 W Sunrise Blvd

38,000

Direct

$8.75

38,000

Direct

$7.25 NNN Pompano Beach

Lanter Delivery Systems

1901 NW 25th Ave

Fort Lauderdale

SIGNIFICANT SALES TRANSACTIONS PROPERTY ADDRESS

BUYER NAME

USPS Distribution Facility

Terra Group

2800-2898 SW 42nd St

TA Realty

2800 N Andrews Ave

SIZE

SALES PRICE $

$/SF

SUBMARKET

354,377

23,500,000

66

Pembroke Pines

151,389

21,000,000

139

Hollywood

Blackstone

215,020

14,169,657

66

Pompano Beach

5400 NW 35th Ave

Blackstone

132,310

12,100,000

91

Ft. Lauderdale

2650 SW 145th Ave

Gramercy

81,721

11,000,000

135

Ft. Lauderdale

MAJOR DEVELOPMENT PIPELINE PROPERTY ADDRESS

COMPLETION

20311 Sheridan St

Q1 2018

4030 NW 126th Ave

Q4 2018

5255 Johnson Rd

SIZE

DEVELOPER

SUBMARKET

224,572

Core5/Helms

SW Broward

212,160

Exeter Property Group

Coral Springs

Q1 2018

151,050

Elite Aluminium Corp

Coral Springs

1650 NW 18th St

Q1 2018

133,262

Butters Construction & Development

Pompano Beach

2405 College Ave

Q1 2018

130,802

N/A

SW Broward

ONE COMMERCIAL REAL ESTATE | BROWARD | RETAIL | Q4 2017


PALM BEACH INDUSTRIAL

MARKET TRENDS

MARKET DEMANDS NEW SUPPLY

Q4 2017 INDUSTREIAL REPORT

AS VACANCY RATES TIGHTEN

EXECUTIVE SUMMARY

Q4 2017

Q3 2017

FORECAST

2.47%

i

g

NET ABSORPTION SF

492,860

h

h

CONSTRUCTION SF

231,802

h

h

COMPLETIONS SF

111,275

i

h

10.466

h

h

VACANCY

The Palm Beach Industrial market continues to experience tight inventory with skyrocketing rental rates. In the last quarter, rental rates jumped to around $10.46 per SF, which marks a 3.81% increase since last quarter. At the same time, vacancies decreased by 32 basis-points, while absorption rates were increasing to 492,860 SF. Even if market fundamentals are positive for new construction, development has not picked up yet. As of now there are only 231,802 SF under development.

OUTLOOK With e-commerce disrupting the retail, an increasing need for “last-mile delivery” has become a driving force behind the expansion of the industrial segment. Demand for quality industrial space remains strong, as new industrial space is more functional and offers operation cost benefits. Palm Beaches available stock continues to remain tight, as construction has not yet picked up yet. With the continuing strengths of the economy a pickup in construction activity in the industrial segment can be expected.

GROSS LEASE RATE

RELATIVE TO PRIOR PERIOD | SOURCE: COSTAR PROPERTY®

ECONOMIC OVERVIEW 1 YR CHANGE

Q4 2017

CHANGE

UNEMPLOYMENT RATE

3.6%

- 23.4%

POPULATION GROWTH

1,503,310

+ 2.76%

MEDIAN HOUSEHOLD INCOME

59,355

+ 2.25%

LABOR FORCE

626,120

+ 1.63%

CHANGE AS PER YEAR-TO-DATE | SOURCE: US DEPARTMENT OF LABOR STATISTICS

MARKET ACTIVITY About 492,8660 SF of industrial space were absorbed in the past quarter and 111,275 SF of new supply added to the market. Palm Beach’s vacancy dropped slightly to 2.47% from the previous period with asking rents stagnating around to $10.46 per SF. The booming e-commerce sector is merging industrial and retail landscapes and creating a need for regional distribution centers. Providing on-demand delivery has caused the industrial market to become the greatest beneficiary of challenges in the retail sector. In combination with a growing population and increasing local demand industrial rents and new construction are propelling in Palm Beach. Palm Beach has one of the most diverse economies in the United States. The county combines its core competencies agriculture and leisure with a strong science and technology-based component. These areas include aerospace, life sciences and health sciences. The Port of Palm Beach employs approximately 2,400 people and ships 100% of the in the Everglades produced raw sugar. Palm Beach’s job growth has been uninterrupted, and was adding 1.6% of new jobs year over year. The industry with the largest growth has been the construction sector increasing by 10.1% yearto-date. Palm Beach County is the region with the largest amounts of undeveloped land, which recently experienced a development of planned communities, which is spurring demand for storage space.

28 ONE COMMERCIAL REAL ESTATE | PALM BEACH | INDUSTRIAL L | Q4 2017


Even with market fundamentals being positive as vacancies enter a record low and a strong rent growths and demand for industrial space reach record heights, new development has not yet picked up in Palm Beach. Currently there are about 231,802 SF under construction. The largest project is Turnpike Crossing by Duke Realty which will add 166,392 SF of class A industrial space to the market place. Palm Beach experienced $56.5 million in sales in the 4th quarter of 2017. The largest transaction marked the sale of a 84,384 SF FedEx Ship Center for $16.0 million. Realterm Logistics invests in warehouses nationwide. It said it acquired the Boca Raton facility because it’s a last-mile distribution center with close access to Interstate 95, Military Trail and Glades Road.

COMPLETIONS, ABSORPTION AND VACANCY TRENDS COMPLETIONS

ABSORBTION

VACANCY

SOURCE: COSTAR PROPERTY®

700K

7.00%

600K

6.00%

500K

5.00%

400K

4.00%

300K

3.00%

200K

2.00%

100K

1.00% 0.00%

0

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

AVERAGE ASKING RENTS TRENDS FLEX

WAREHOUSE

OVERALL

SOURCE: COSTAR PROPERTY®

14

12

10

8

6

4

2

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

PRICE TRENDS CAP RATE

$/SF

SOURCE: REAL CAPITAL ANALYTICS

130

9.50%

120

9.00%

110

8.50%

100

8.00%

90

7.50%

80

7.00%

70

6.50%

60

6.00% Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2014

29 ONE COMMERCIAL REAL ESTATE | PALM BEACH | INDUSTRIAL | Q4 2017


INDUSTRIAL STATISTICS SUBMARKET

TYPE

TOTAL INVENTORY (SF)

VACANCY (%)

YTD NET ABSORBTION

YTD DELIVERIES UNDER CONSTRUCTION GROSS LEASE RATE

(SF)

(SF)

(SF)

45th Street

Total

1,595,288

2.54%

21,727

-

-

17.80

Warehouse

1,127,529

1.11%

31,400

-

-

11.46

Flex

467,759

6.00%

(9,673)

-

-

22.39

Arvida Pk of Commerce

Total

4,986,928

2.00%

92,743

23,446

-

13.84

Warehouse

2,785,866

1.36%

40,555

-

-

13.05

Flex

2,201,062

2.82%

52,188

23,446

-

14.56

Austin Park/Hill/53rd

Total

2,714,279

0.29%

35,149

-

-

7.68

Warehouse

2,561,038

0.14%

37,954

-

-

7.45

Flex

153,241

2.77%

(2,805)

-

-

9.75

Boca Raton East

Total

3,331,536

1.28%

2,601

-

-

12.38

Warehouse

2,237,662

1.00%

(203)

-

-

11.48

Flex

1,093,874

1.85%

2,804

-

-

17.85

Boca Raton West

Total

193,707

0.00%

5,202

-

-

-

Warehouse

149,707

0.00%

5,202

-

-

-

Flex

44,000

0.00%

-

-

-

-

Boynton Beach

Total

5,238,582

2.47%

98,481

91,479

-

8.38

Warehouse

4,373,633

2.64%

81,390

91,479

-

8.15

Flex

864,949

1.64%

17,091

-

-

13.43

Central Palm Bch Area

Total

5,561,027

1.10%

6,567

-

-

8.51

Warehouse

4,982,143

1.04%

(683)

-

-

8.44

Flex

578,884

1.64%

7,250

-

-

10.29

Delray Beach

Total

2,983,795

1.69%

83,029

3,287

-

15.35

Warehouse

2,504,347

1.86%

79,969

3,287

-

14.92

Flex

479,448

0.82%

3,060

-

-

23.51

DtwnPB to Tri-RailSta

Total

2,140,598

1.26%

33,222

-

-

10.71

Warehouse

1,895,854

0.31%

31,722

-

-

10.70

Flex

244,744

8.66%

1,500

-

-

10.76

Electronics Way

Total

1,638,176

0.81%

90,580

-

17,500

10.81

Warehouse

1,453,988

0.91%

90,580

-

17,500

10.81

Flex

184,188

0.00%

-

-

-

-

Jupiter

Total

3,036,950

1.09%

993

-

-

14.01

Warehouse

2,045,699

1.22%

1,870

-

-

13.75

Flex

991,251

0.81%

(877)

-

-

15.74

Lake Park East

Total

255,532

4.21%

1,757

-

-

8.50

Warehouse

255,532

4.21%

1,757

-

-

8.50

Flex

-

0.00%

-

-

-

-

Lake Park West

Total

1,848,752

0.79%

7,290

4,300

-

12.50

Warehouse

1,508,876

0.81%

4,730

4,300

-

12.66

Flex

339,876

0.71%

2,560

-

-

12.05

Lake Worth East

Total

2,492,353

1.09%

(12,395)

-

30,341

12.60

Warehouse

2,053,689

0.88%

(4,395)

-

30,341

12.23

Flex

438,664

2.05%

(8,000)

-

-

15.33

Lake Worth West

Total

3,209,752

7.11%

164,048

15,000

-

8.84

Warehouse

2,542,908

8.92%

156,048

15,000

-

8.46

Flex

666,844

0.21%

8,000

-

-

13.45

Lewis Terminals

Total

3,260,229

2.78%

9,927

-

-

8.61

Warehouse

3,177,764

2.85%

7,127

-

-

8.61

Flex

82,465

0.00%

2,800

-

-

-

Palm Bch Cty Outlying

Total

3,222,095

2.17%

44,409

9,110

7,241

10.71

Warehouse

3,063,254

2.01%

44,409

9,110

7,241

10.71

Flex

158,841

5.10%

-

-

-

-

Palm Beach Airport

Total

4,129,026

2.86%

256,366

-

166,392

9.59

Warehouse

3,591,081

2.01%

275,291

-

166,392

9.33

Flex

537,945

8.57%

(18,925)

-

-

11.36

Palm Beach Gardens

Total

692,645

9.77%

(56,579)

-

-

11.98

Warehouse

359,919

17.28%

(62,183)

-

-

9.92

Source: CoStar Property® ONE COMMERCIAL REAL ESTATE | PALM BEACH | INDUSTRIAL | Q4 2017


INDUSTRIAL STATISTICS SUBMARKET

TYPE

TOTAL INVENTORY (SF)

VACANCY (%)

YTD NET ABSORBTION

YTD DELIVERIES UNDER CONSTRUCTION GROSS LEASE RATE

(SF)

(SF)

(SF)

Flex

332,726

1.66%

5,604

-

-

13.35

Port Area

Total

367,627

0.00%

-

-

-

-

Warehouse

348,727

0.00%

-

-

-

-

Flex

18,900

0.00%

-

-

-

-

Southern Blvd.

Total

1,564,508

20.61%

252,778

283,939

-

8.31

Warehouse

1,498,562

21.52%

251,938

283,939

-

8.31

Flex

65,946

0.00%

840

-

-

-

West of Turnpike

Total

4,758,787

1.32%

42,290

-

10,328

12.93

Warehouse

3,430,721

1.33%

(7,560)

-

-

13.19

Flex

1,328,066

1.32%

49,850

-

10,328

12.72

Westroads Area

Total

2,280,484

0.00%

3,300

-

-

7.81

Warehouse

2,094,743

0.00%

3,300

-

-

7.81

Flex

185,741

0.00%

-

-

-

-

Total

61,502,656

2.47%

1,183,485

430,561

231,802

10.46

Warehouse

50,043,242

2.51%

1,070,218

407,115

221,474

9.79

Flex

11,459,414

2.28%

113,267

23,446

10,328

14.06

Source: CoStar Property® ONE COMMERCIAL REAL ESTATE | PALM BEACH | INDUSTRIAL | Q4 2017


SIGNIFICANT LEASE TRANSACTIONS PROPERTY ADDRESS

TENANT NAME

SIZE

LEASE TYPE

LEASE RATE

SUBMARKET

NNNLantana

403 Hillbrath Dr

16,227

Direct

20.71

1865-1885 Old Okeechobee Rd

Klima Control

17,233

Direct

7.95

701 Boutwell Rd

Lake Worth

19,584

Direct

7.95

401 N Clearly Rd

23,292

Direct

7.95

West Palm Beach

3402-3430 Quantum Blvd

29,058

Direct

7.95

Boynton Beach

West Palm Beach

NNNLake Worth

SIGNIFICANT SALES TRANSACTIONS PROPERTY ADDRESS

BUYER NAME

SIZE

SALES PRICE $

$/SF

SUBMARKET

FedEx Ship Center

Realterm Global

150 Toney Penna Dr

Jupiter Medical Center

84,384

16,000,000

190

Boca Raton

23,860

5,300,000

222

Brown & Moving Storage

Jupiter

Old Okeechobee LP

38,230

3,600,000

94

West Palm Beach

4726 NW 2nd Ave

James Batmasian

36,000

3,180,000

88

Boca Raton

9040 Belvedere Rd

Jean Chardon

51,600

2,575,000

50

palm Beach

MAJOR DEVELOPMENT PIPELINE PROPERTY ADDRESS

COMPLETION

SIZE

DEVELOPER

SUBMARKET

Turnpike Crossing - Bldg. 6

Q1 2018

166,392

Duke Realty

Palm Beach Airport

420 N 4th St

Q1 2018

26,941

Acorn Mini Storage

Lake Worth

2649 Electronics Way

Q2 2018

17,500

Realty Exchange

Electronics Way

3040 Fairlane Farms Rd

Q3 2018

10,328

Wellington Land Dev

West of Turnpike

2401 Eagle Ln

Q1 2018

7,241

N/A

Palm Beach County

Outlying

ONE COMMERCIAL REAL ESTATE | PALM BEACH | RETAIL | Q4 2017


STEVEN NOSTRAND President & COO ONE Commercial Real Estate

PALM BEACH

snostrand@onecommercialre.com

JULIAN SCHEEFF Director of Intelligence ONE Commercial Real Estate jscheeff@onecommercialre.com

ALEX MAKKI Marketing Coordinator ONE Commercial Real Estate amakki@onecommercialre.com

BROWARD MIAMI-DADE

ONE Commercial Real Estate 1000 Brickell Avenue, Suite 500 Miami, FL 33131 305.704.9787

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Q4 Market View | Industrial  
Q4 Market View | Industrial  
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