Q2 2022 South Dade Industrial Report
Submarket Analysis
Executive Briefing on Submarket (Flex R&D) Conditions
The average Asking Rent was $10.00 in the South Dade submarket
- Rent in the South Dade submarket was up 1.6% from Q3 2021.
- South Dade submarket had its fastest rent rate of increase since Q3 2010.
- Rent is expected to finish 2022 at $10.28 in the South Dade submarket
The average Vacancy Rate was 1.8% in the South Dade submarket
- No vacancy change since Q3 2021 in the South Dade submarket.
- Vacancy is expected to finish 2022 at 1.9% in the South Dade submarket.
Submarket Overview
The South Dade submarket, one of seven distinct geographic concentrations within Miami, contains 1.5 million market rate rental square feet, or 7.9% of the metro’s total inventory of Flex/ R&D space. In the nine- year period beginning with Q1 2012, new additions to the submarket totaled 35,000 square feet, amounting to an annualized inventory growth rate of 0.2%; over the same period, the metro inventory has remained unchanged.
Asking and Effective Rent
During the fourth quarter of 2021, asking rents advanced by 1.6% to an average of $10.00, higher than three of the metro’s seven submarkets. Over the past four quarters, asking rents have increased a total of 3.1%, up from $9.70. The South Dade submarket’s current asking rent levels are lower than the metro’s average of $12.05, while asking rent growth in the fourth quarter is equal to the metro average of 1.6%. Effective rents, which exclude the value of concessions offered to prospective tenants, increased by 1.8% during the fourth quarter to an average of $9.24.
Competitive Inventory, Employment, Absorption
Total employment in the Miami metropolitan area grew by 19,300 jobs during the fourth quarter, 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. Over the same time period, the metro recorded an average annual absorption rate of 124,300 square feet. During the fourth quarter, the metro experienced absorption of 78,000 square feet, but absorption was flat in the South Dade submarket. The fourth quarter’s unchanged occupancy total in the submarket follows two consecutive quarters of positive absorption, amounting to 10,000 square feet. Over the last four quarters, submarket absorption totaled 11,000 square feet, 1.8% lower than the average annual absorption rate of 11,200 square feet recorded since the beginning of Q1 2012. The submarket’s average vacancy rate held steady at 1.8% during the fourth quarter, which is 2.4 percentage points lower than the long-term average, and 1.0 percentage points lower than the current metro average.
Executive Briefing on Submarket (Distribution) Conditions
The average Asking Rent was $8.83 in the South Dade submarket
- Rent in the South Dade submarket was up 1.4% from Q3 2021
- Rent is expected to finish 2022 at $9.24 in the South Dade submarket.
The average Vacancy Rate was 0.6% in the South Dade submarket
- The South Dade submarket had the lowest vacancy in the South Atlantic region, fourth lowest in the nation.
- The South Dade submarket had the lowest vacancy level since Q3 2009.
Submarket Overview
The South Dade submarket, one of seven distinct geographic concentrations within Miami, contains 11.8 million market rate rental square feet, or 9.5% of the metro’s total inventory of warehouse/distribution space. In the nine-year period beginning with Q1 2012, new additions to the submarket totaled 971,000 square feet, amounting to an annualized inventory growth rate of 0.9%; over the same period, the metro growth rate has been 1.7%.
Asking and Effective Rent
Asking rents advanced by 1.4% during the fourth quarter of 2021 to an average of $8.83, higher than four of the metro’s seven submarkets. Since the same reporting period last year, asking rents have risen by 2.7%, up from $8.60. The South Dade submarket’s current asking rent levels are higher than the metro’s average of $8.14, while asking rent growth in the fourth quarter is equal to the metro average of 1.4%. Effective rents, which take into account concessions offered to new lessees, increased more quickly, up by 1.8% during the fourth quarter. The faster pace of effective rent growth suggests that landlords are enjoying more pricing power at the negotiating table.
Competitive Inventory, Employment, Absorption
Total employment in the Miami metropolitan area increased by 19,300 jobs during the fourth quarter, 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. Over the same time period, the metro experienced an average annual absorption rate of 2.5 million square feet. During the fourth quarter, metropolitan absorption totaled 1.9 million square feet, of which the South Dade submarket captured 8.7%, or 161,000 square feet. Over the last four quarters, submarket absorption totaled 332,000 square feet, more than double the average annual absorption rate of 146,000 square feet recorded since the beginning of Q1 2012. The submarket’s average vacancy rate declined by 140 basis points during the fourth quarter to 0.6%, which is 3.7 percentage points lower than the long-term average, and 2.7 percentage points lower than the current metro average.
Other Q2 2022 Industrial Reports
Q2 2022 Miami Metro Industrial Report
Q2 2022 Hialeah/E. Miami Shores Industrial Report
Q2 2022 Miami Airport Industrial Report