Miami industrial, luxury retail space hot
As the Miami temperature drops heading into the winter season, demand for industrial property is sizzling, with the investment industry now deeming Miami a Tier 1 city, according to Steve Medwin, a managing director at Jones Lang LaSalle South Florida.
“Prices went from a $1 million an acre [before the recession], down to about $400,000 an acre in the bottom of 2009 in Doral, and are now back to about $750,000 an acre – if you can find it,” Medwin told World Property Channel.
Land prices are reaching record levels, garnering as much as the pre-recession asking prices of $1 million per acre for the right piece of land. Currently, there is about 4 million square feet of space gearing up for development in the Miami area.
While the U.S. economy recovers, making commercial investing a viable option once again, growth in the Latin American economy should not be overlooked as a key ingredient to Miami’s commercial real estate success.
The Panama Canal expansion is also a boon for Miami, with larger-sized container ships sailing to Miami starting in 2015, according to World Property Channel.
“[Real estate investment trusts], the life insurance companies, private equity firms, all have raised tremendous amount of capital for real estate… they want to have a location here,” Medwin said of Miami.
Developers generated nearly 300,000 square feet of warehouse and distribution space in the city during the third quarter of 2013, and an additional 733,737 square feet of space is currently under construction, according to CBRE.
“We are seeing is a lot of speculative construction by these big institutions who were able to buy land in the last couple of years and they are all delivering around the same time,” Medwin said. “There are a number of choices so rental rates are staying low there, they’re not shooting through the roof.”
Luxury retail in Miami
Industrial space isn’t the only commercial real estate sector flying high around South Beach.
The New York Times reported that Miami’s luxury retail market is one of the best in the nation, and a who’s-who list of premier brands are planning to leave Miami’s high-end Bal Harbour space for the Miami Design District, which is roughly 10 miles from Bal Harbour.
In 2012, the International Council of Shopping Centers called Bal Harbour the single most productive shopping center on the planet, which was measured by sales per square foot.
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