While Miami’s office market fuels excitement with new, high-profile Wall Street and Silicon Valley tenants, it’s the region’s industrial market that remains strongest.
“Miami saw its strongest quarterly performance since the start of the recovery from the Great Recession,” a Newmark report noted.
Industrial vacancy in Miami-Dade County was at its lowest point since 2018 in the second quarter of 2021, totaling 4.4 percent, a Avison Young report found. Plus, 2.3 million square feet of industrial space was delivered during the prior quarter, per Newmark’s report, making the vacancy drop all the more impressive.
Net absorption jumped to 2.1 million square feet, up from 929,950 square feet the prior quarter, according to Newmark. In just half a year, 2021’s absorption rate has already surpassed the two previous years, recording 3 million square feet of positive net absorption.
Leading the charge were warehouse and distribution centers, typically used to fulfill e-commerce orders, which soared during the pandemic as people stayed home. They absorbed 2.7 million square feet by 2021’s midpoint, per Newmark.
Following these trends, rental rates grew. Base rental rates increased by 9.5 percent to $10.15 per square foot between the first and second quarters of 2021, per Avison Young.
Miami’s office market has garnered attention as the city vies to become a tech and financial center, with giants Blackstone and Point72 Asset Management signing leases this year. But those aspirations have yet to translate into a booming market.
Miami-Dade’s office vacancy rate was at its highest point in eight years in the second quarter of 2021, at 16.9 percent, according to Avison Young. Net absorption rates remained negative as well, ending the quarter 144,262 square feet in the red, per Newmark.