3Q 2016 Broward County MarketBeat
Industrial Snapshot Q3 2016 BrowardCounty MARKETBEAT
Economy Broward County continued to be a business portal to companies seeking a location in the heart of the tri-county area of South Florida, Employment increased by 25,000 over the past twelve months and the unemployment rate decreased 60 basis points (BPS) to 4.6% on strong gains for companies in the industrial sector. Jobs in trade transportation & utilities accounted for 4.8% of the expansion year over year, the second fastest yearly job growth rate compared to all metro areas in Florida. Broward County also experienced a 3.6% surge in manufacturing jobs over the past year. Market Overview The overall Broward County industrial market remained healthy, with a vacancy rate of 5.5%, the lowest since 2008. Unwavering demand for space drove leasing activity to 3.2 million square feet (SF) year to date, as wholesale distributors, construction firms and suppliers represented a majority of companies involved in space acquisition. The market experienced 480,172 SF of positive absorption through the third quarter. As space availability continued to decrease, industrial rental growth rates in Broward County remained competitive compared to the overall South Florida market. Broward County’s warehouse/distribution sector continued to experience record low vacancy rates. The overall vacancy decreased 110 BPS to 6.0% as tenant demand for small bay and larger cross dock space remained strong. Asking rental rates of $8.83 per square foot (PSF), reflected rising demand in a healthy industrial market. Over 910,000 SF of speculative warehouse/distribution development was currently under construction in Broward County with no new starts announced in the third quarter. The strongest demand from tenants was for space in the 15,000 to 25,000 SF range. These smaller sized tenants are a major driver in the region. Although the outlook for the industrial market remained upbeat, the market experienced only moderate growth in investment sales activity during the third quarter. This is reflective of a lack of quality product available to purchase and that many core assets throughout the County traded hands in the first half of the year. Outlook The industrial market in Broward County continued to display improving fundamentals. Significant space absorption, coupled with historically low supply drove rent growth and created confidence with developers to build. Cushman & Wakefield remains optimistic that key market drivers and new construction will support further improvement in the industrial sector going into 2017.
BROWARD INDUSTRIAL
Economic Indicators
12-Month Forecast
Q3 2015
Q3 2016
Broward Employment
995.8k
1.015 mil
Broward Unemployment
5.2 %
4.6%
U.S. Unemployment
5.2%
4.9%
Market Indicators (Overall, All Classes)
12-Month Forecast
Q3 2015
Q3 2016
Vacancy
6.1%
5.5%
Net Absorption (sf)
482,672
511,427
Under Construction (sf)
688,517
910,108
8
Average Asking Rent*
$7.63
$8.12
*Rental rates reflect net asking $psf/year
Overall Net Absorption/Overall Asking Rent 4Q TRAILING AVERAGE
800.0
$10.00 $12.00 $14.00
600.0
400.0
$0.00 $2.00 $4.00 $6.00 $8.00
200.0
0.0
-200.0
2012
2013
2014
2015
2016
Net Absorption, SF (thousands)
Asking Rent, $ PSF
Overall Vacancy
10.0% 12.0%
0.0% 2.0% 4.0% 6.0% 8.0%
Historical Average = 7.8%
2012
2013
2014
2015
2016
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