Q2 2022 Miami Metro Industrial Report
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Metro Analysis
Executive Briefing on Market (Flex R&D) Conditions
The average Asking Rent was $12.05 in the Miami Metro
- Rent in the Miami metro was up 1.6% from Q3 2021.
- Miami metro had its fastest rent rate of increase since Q3 2009.
- Rent is expected to finish 2022 at $12.44 in the Miami metro.
The average Vacancy Rate was 2.8% in the Miami metro
- The Miami metro had the second lowest vacancy in the nation, behind only Orange County.
- Vacancy in the Miami metro drifted downward by 40 basis points.
- The Miami metro had the lowest vacancy level since Q3 2009.
Market Overview
A summary of key real estate supply and demand metrics reveals that during the fourth quarter the Miami Flex/ R&D market experienced positive net absorption, increasing effective rents, and downward movement in the market’s vacancy rate. It is meaningful to look at each of these critical barometers in more detail and from both a historical and forecast perspective.
Asking and Effective Rent
Asking rents in Florida’s second most populous city climbed by 1.6% during the fourth quarter of 2021 to an average of $12.05. This increase is consistent with directional movements in each of the past four quarters, during which asking rents have risen by a total of 3.4%. Since the beginning of Q1 2012, the metro as a whole has recorded an annual average increase of 1.4%. Effective rents, which exclude the value of concessions offered to prospective tenants, advanced by 1.8% during the fourth quarter to an average of $11.29. During the past four quarters, positive movement in asking rent was recorded in all seven of the metro’s submarkets.
Competitive Inventory, Employment, Absorption
Total employment in the Miami metropolitan area grew by 19,300 jobs during the fourth quarter, amounting to a growth rate of 1.7%, while industrial employment expanded by 1,700. Since the beginning of Q1 2012, the average growth rate for industrial using employment in Miami has been 0.5% per year, representing the average annual addition of 700 jobs. The metro experienced absorption of 78,000 square feet during the fourth quarter. Over the last four quarters, market absorption totaled 164,000 square feet, 31.9% greater than the average annual absorption rate of 124,300 square feet recorded since the beginning of Q1 2012. In a long- term context, the fourth quarter vacancy rate is 2.4 percentage points lower than the 5.2% average recorded since the beginning of Q1 2012.
Executive Briefing on Market (Distribution) Conditions
The average Asking Rent was $8.14 in the Miami Metro
- Rent in the Miami metro was up 1.4% from Q3 2021.
- Miami metro had its fastest rent rate of increase since Q3 2009.
- Rent Has risen for six consecutive quarters in the Miami metro.
The average Vacancy Rate was 3.3% in the Miami metro
- Vacancy in the Miami metro declined by 150 basis points.
- The Miami metro was among the 20 lowest vacancies nationally.
- Vacancy is expected to finish 2022 at 3.3% in the Miami metro.
Market Overview
A comprehensive examination of the Miami warehouse/ distribution market suggests that the primary concentrations of competitive warehouse/distribution space are located in the Miami Airport submarket, amounting to 25.9 million square feet and 20.9% of the metropolitan inventory, followed by Hialeah/East Miami Shores, with a 20.2% share, and Hialeah Gardens/Medley (20.0%). Since the beginning of Q1 2012, the fastest growing area has been the Miami Lakes submarket, adding 6.2 million square feet over that period, or 31.9% of total metropolitan warehouse/distribution completions.
Asking and Effective Rent
During the fourth quarter of 2021, asking rents in Florida’s second most populous city climbed by 1.4% to an average of $8.14. The market has now experienced six consecutive quarterly gains in asking rent, for a cumulative total of 5.2%. Since the beginning of Q1 2012, the metro as a whole has recorded an annual average increase of 2.3%. Effective rents, which take into account concessions offered to new lessees, increased more quickly, up by 1.8% during the fourth quarter. The narrowing gap between asking and effective rents suggests that that landlords are enjoying more pricing power at the negotiating table. During the past four quarters, positive movement in asking rent was recorded in all seven of the metro’s submarkets.
Competitive Inventory, Employment, Absorption
Total employment in the Miami metropolitan area grew by 19,300 jobs during the fourth quarter, representing a growth rate of 1.7%, while industrial employment grew by 1,700. Since the beginning of Q1 2012, the average growth rate for industrial-using employment in Miami has been 0.5% per year, representing the average annual addition of 700 jobs. Leasing activity generated 1.9 million square feet of absorption during the fourth quarter. Over the last four quarters, market absorption totaled 7.2 million square feet, nearly triple the average annual absorption rate of 2.5 million square feet recorded since the beginning of Q1 2012. From an historical perspective, the fourth quarter vacancy rate is 4.1 percentage points lower than the 7.4% average recorded since the beginning of Q1 2012.
Other Q2 2022 Industrial Reports
Q2 2022 Hialeah/E. Miami Shores Industrial Report
Q2 2022 Miami Airport Industrial Report
Q2 2022 South Dade Industrial Report