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Cost of Commercial Industrial Sites Since almost two-thirds of survey respondents identified the cost of commercial and industrial sites as a drawback of their presence in Miami-Dade, this section examines the state of the industrial market. There are supply and demand factors which impact the inventory and cost of space. In the last three years, the U.S. industrial market has experienced a slowly increasing inventory, rising lease rates and high absorption rates. E-commerce is driving significant change within the industrial property sector, along with changes in the supply chains, new technologies, and automation. In their 2019 North American Industrial Outlook, Cushman and Wakefield project that “economic growth and the continued buildout of eCommerce fulfillment networks will buttress demand for industrial real estate.”* In the manufacturing sector specifically, “employing more adaptive manufacturing methods like 3-D printing could create leaner supply chains and lead to the proliferation of smaller manufacturing facilities closer to major population centers.”** The national industrial space trends are characteristics of Miami as well. Total rentable industrial building area in Miami increased by 9% since 2009. Industrial space vacancy decreased from 9.8% in 2009 to 4.5% in the beginning of 2019. Cost of industrial space per sq. ft. increased by 47% (CoStar). In relation to supply, manufacturing space has increased in recent years. In the first quarter of 2019, there were 354 manufacturing buildings with a total of over 19.1 million square feet of space.(Cushman and Wakefield, Miami-Dade Industrial Marketbeat Q1 2019) However, in mid2013, Miami-Dade had almost 21.9 million square feet of manufacturing space, with a 4.0% vacancy and average rent of $5.20.
Manufacturing Space Characteristics 4Q 2017
1Q 2019
Inventory: 18.2 sq. ft.
Inventory: 19.1 sq. ft.
Vacancy: 2.1%
Vacancy: 2.7%
Lease rate: $6.43
Lease rate: $7.91
*Cushman and Wakefield, 2019 North American Industrial Outlook. http://www.cushmanwakefield.us/en/ research-and-insight/2019/northamerican-industrialoutlook ** Alhburn, Aaron. Industrial Real Estate 2018: Disruptions and Structural Shifts. Commercial Real Estate Development Association (NAIOP) Magazine. https://www.naiop.org/Magazine/2018/Spring-2018/Business-Trends/ Industrial-Real-Estate-2018-Disruptions-and-Structural-Shifts 44 | Make it Miami Manufacturing Report
