Cushman & Wakefield today released first quarter statistics for the U.S. and South Florida industrial markets, which show the overall industrial vacancy rates for Miami-Dade, Broward and Palm Beach counties remain below the national average.
The overall vacancy rate for the U.S. industrial market declined to 10.2 percent at the end of the first quarter of 2011, a 0.1 percentage point decrease from 10.3 percent at year-end 2010, and down from 10.8 percent at this time last year. Vacancy declined in 22 of the 34 U.S. industrial markets tracked by Cushman & Wakefield quarter-over-quarter, with the Inland Empire, Calif. (declined to 10.2 percent from 11.0 percent), Jacksonville, Fla. (declined to 11.6 percent from 12.2 percent) and Hartford, Conn. (declined to 14.0 percent from 14.7 percent) charting the largest declines. Vacancy in Miami-Dade declined to 7.5 percent, down from 7.9 percent last quarter and down from 8.9 at this time last year. In Broward, the first quarter vacancy rate was 9.3 percent, a 0.4 percentage point increase from 8.9 percent at year-end 2010, but down from 10.2 percent at this time last year. In Palm Beach, the overall vacancy rate inched up to 9.1 percent from 9.0 percent at the end of 2010, though down from 9.4 percent at this time last year.
Leasing activity in the U.S. totaled 68.0 million square feet in the first three months of 2011, up 12.5 percent from the 60.4 million square feet leased at this time last year, and the strongest first quarter since 2007, when 79.3 million square feet was leased. The U.S. industrial markets with the largest percentage increases in leasing activity included Long Island, NY (up 172 percent), Suburban Maryland (up 118.8 percent) and Silicon Valley, Calif. (up 65.1 percent). In Miami-Dade, industrial leasing activity totaled 1.4 million square feet, up 42.2 percent from 1.0 million square feet leased in the first quarter of 2010. Industrial leasing activity in Broward totaled 691,947 square feet at the end of the first quarter, down 23.2 percent from 900,762 square feet at this time last year. Leasing activity in Palm Beach increased 3.2 percent, totaling 239,368 square feet in the first quarter.
"We foresee increased activity in all three counties over the next six to nine months, as the economy stabilizes and tenants capitalize on current rental rates," said Shane Soefker, senior managing director and branch manager of Cushman & Wakefield's South Florida offices.
New construction remained limited, with 3.2 million square feet of new product added to the U.S. market so far this year, on par with the 3.2 million square feet delivered in the first quarter of 2010, and the lowest amount of construction completions since Cushman & Wakefield started tracking the U.S. industrial market. No new industrial space was added to the market in Miami-Dade or Broward, while 15,000 square feet of new industrial space was added to the market in Palm Beach.
Overall absorption in the U.S. - which can be positive or negative in relation to whether more space is being occupied (positive absorption) or added to the market vacant (negative absorption) - was positive 7.7 million square feet at the end of the first quarter, up from negative 15.8 million square feet at this time last year. In Miami-Dade, absorption measured positive 778,553 square feet, an increase from the positive 497,232 square feet of absorption in the first quarter of 2010. Overall absorption measured negative 243,850 square feet in Broward, down from positive 264,976 square feet at this time last year. Overall absorption in Palm Beach was positive 88,243 square feet, a decrease from positive 111,918 square feet at this time last year.
"Leasing activity in the U.S. has returned to levels we haven't seen since pre-recession," said Jim Dieter, executive vice president and head of U.S. Industrial Brokerage. "With this strong rebound in demand, coupled with declining supply, the U.S. industrial market is steadily making its way towards recovery."