News Summary
The industrial real estate market in South Florida is seeing increased vacancy rates as new property supply outstrips demand. Miami-Dade County’s vacancy rate rose to 5.5%, while Palm Beach County recorded the highest rate at 6.3%. Despite these vacancies, significant leasing activity occurred, particularly in Broward County, which remains healthier at a 4.1% vacancy rate. The shift towards smaller industrial spaces is evident, with larger properties experiencing prolonged vacancies. Economic uncertainty continues to pose challenges for tenants and landlords alike.
Florida – The industrial real estate market in South Florida is witnessing a notable increase in vacancy rates as the supply of new properties outpaces demand. According to recent data from JLL, Miami-Dade County’s industrial vacancy rate rose to 5.5% in the first quarter of 2025, up from 5% in the prior quarter. This trend signals a growing concern for investors and developers navigating the rapidly changing landscape of industrial leasing.
In Miami-Dade, the uptick in vacancy rates correlates with the completion of newly constructed industrial spaces. The average asking rent in the county currently stands at $16.58 per square foot. Despite the overall rise in vacancies, the first quarter of 2025 saw 2 million square feet of new leasing activity recorded. Notable new leases include a significant agreement with Performance Food Group, which occupies 229,285 square feet at 3595 Northwest 125th Street, and Garland Foods, which has leased 174,400 square feet at a new Class A development in Hilco Medley.
Contrastingly, Palm Beach County is grappling with its own set of challenges as it experiences a surge in industrial vacancies. The county recorded only 100,000 square feet of leasing activity in the same timeframe, while the amount of available space increased by 1 million square feet. Consequently, the industrial vacancy rate in Palm Beach County climbed to 6.3%, now the highest among the three counties in South Florida. Average asking rents in this region are lower, at $14.27 per square foot.
Broward County, on the other hand, maintains a healthier industrial market. With a vacancy rate of 4.1% and average lease rates at $16.29 per square foot, Broward distinguishes itself from its neighboring counties. The region reported 950,000 square feet of leasing activity during the same quarter, with Transpire Bio securing the largest new deal by leasing 139,020 square feet at the South Florida Distribution Center in Pembroke Pines.
Looking back, the industrial market has seen a compelling shift in tenant demand over recent years, particularly towards smaller industrial spaces of under 25,000 square feet. In stark contrast, larger properties exceeding 100,000 square feet are undergoing prolonged periods of vacancy, necessitating patience from landlords in securing tenants.
The ongoing economic uncertainty appears to contribute to corporate executives’ hesitation to finalize larger leases. Since 2019, rental rates across the region have nearly doubled, presenting significant challenges for tenants during lease renewals. While the market remains under pressure, it continues to attract institutional capital, indicating expectations for long-term investment growth despite current difficulties.
In summary, South Florida’s industrial real estate market is experiencing a phase of adjustment, particularly marked by rising vacancy rates and fluctuating demand for industrial spaces. As the market adapts to the changes in tenant preferences and economic conditions, stakeholders are closely monitoring the evolving landscape for opportunities and challenges ahead.
Deeper Dive: News & Info About This Topic
- Commercial Observer: Florida Industrial Logistics Q1 Leasing & Vacancy
- GlobeSt: Industrial Supply in Miami-Dade Outpaces Absorption
- Keat: South Florida Industrial Market Faces Challenges
- Colliers: Miami-Dade County Industrial Research Report
- GlobeSt: Southeast Industrial Boom
- Wikipedia: Industrial Real Estate
- Google Search: Florida Industrial Market
- Google Scholar: Florida Industrial Real Estate
- Encyclopedia Britannica: Industrial Property
- Google News: Florida Industrial Vacancy
