Capital Markets Florida Team

INDUSTRIAL FAST FACTS

Q3 2023

The Latest Trends in Florida’s Industrial Markets – Pushing Back Against Rising Interest Rates

MIAMI

SCARCE AVAILABILITY

DEVELOPERS STILL BULLISH

Despite a 40-bps YOY increase in vacancy, the market remains tight with overall vacancy below 2.0%. Of the 1.6 MSF of new industrial inventory added in 2023, only 13.8% was available for lease.

Builders maintained a confident outlook as construction activity surged to an all time high, with approximately 6.7 MSF of new inventory in progress with nearly 1.0 MSF already preleased. Construction activity may surpass the 8.0 MSF underway mark by the close of the year.

TAMPA BAY

JACKSONVILLE

LABOR MARKET SHOWS STRENGTH HISTORIC QUARTERLY LEASING

ORLANDO RECORD NEW SUPPLY A surge of new product completed in Q3, as 3.4 MSF was added to the market, the most to ever deliver in a single quarter. This brought YTD deliveries to 5.2 MSF with another 4.3 MSF under construction at quarter close. SF of new warehouse and distribution (W/D) products, bringing the year-to date total to an impressive 2.7 MSF. This represents a substantial 55.2% increase compared to the same period in 2022. COMPLETIONS INCREASE Q3 recorded the delivery of nearly 594,000 The labor market in the Tampa Bay region showed durability, maintaining an unemployment rate of 2.8% at the close of the quarter. Although there was a slight 10-basis-point year-over-year increase, it remained notably lower than the national rate of 3.7%.

New leasing activity totaled 3.7 MSF for Q3, a record high for the Jacksonville industrial market. Activity was boosted by two 1.0 MSF leases signed by Sam’s Club and Total Distribution.

ELEVATED RENT GROWTH Overall asking rents ended Q3 at $8.11 PSF NNN, up 16.2% YOY, as premium rents from new construction hit the market. The leasing of existing big box space with lower asking rates allowed for additional average rental rate growth.

CONTINUED RENT GROWTH

Overall asking rates climbed 19.1% YOY to end Q3 at $11.07 PSF NNN. New product with premium asking rates hit the market, pushing rates up. Rents are expected to continue increasing at a steady, healthy pace.

14 | FLORIDA OFFICE & INDUSTRIAL