The new hot property in Miami? Warehouse demand hits an all-time high — and here’s why

Miami-Dade County’s warehouses are going as fast as croquetas and cafecito on a cold day.

Tenants — picture e-commerce, importers, fruit and beverage companies — are having a hard time finding storage space in Miami-Dade to rent with the 1.6% vacancy rate an all-time low, according to the JLL fourth quarter 2023 Miami Industrial report released in January. Miami-Dade County has 216.7 million square feet of warehouse space.

So what’s fueling the demand? Simple: the region’s population growth and tourism.

BEHIND THE NEED FOR MIAMI WAREHOUSES

Florida’s population growth was among the highest in the country during the COVID pandemic. Although Miami-Dade has lost thousands of people in recent years, newcomers and others continue to lean heavily on online shopping. In the most populous county in South Florida, companies are on the lookout for warehouse space near population centers to deliver products quickly.

Tourists have also contributed to the demand for warehouse space.

Last year, the number of tourists visiting Miami-Dade County from January through June rose by 1%, to 12.4 million, according to data from the Greater Miami Convention and Visitors Bureau. More flights and a new luxury wing are underway at Miami International Airport, and PortMiami is booming. That’s led to companies needing more warehouse space to store inventory for the hospitality industry, such as food for travelers or cruise ship items.

“This market has changed — like a metamorphosis — in the last five years,” said Brian Smith, executive managing director at JLL. “We have never seen vacancy so low for this long.”

Vacancy rates are higher for Miami-Dade’s neighbors. Broward has a 3.3% vacancy rate for its total 101.3 million-square-foot warehouse landscape. Palm Beach has a 2.9% vacancy rate for its total 48.7 million-square-foot industrial offerings.

WAREHOUSE RENTS AND FUTURE CONSTRUCTION

As a result of high demand, rents have remained steady year-over-year. Miami-Dade has an average asking rent of $17.04 per square foot, $15.96 in Broward, and $14.82 in Palm Beach.

Companies want even more warehouse space, Smith said. His firm JLL, a Chicago-based international commercial real estate investment strategies and brokerage firm, is tracking 115 tenants searching in South Florida for 7.4 million square feet of storage space.