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​​Florida’s Industrial Stabilization 2023 Midyear Update​

Throughout each major market in Florida, all industrial buildings 50,000 square feet (sf) and greater built from 2016 through 2023 were analyzed for asset stabilization.

The ensuing analysis examines the number of quarters for each building to become stabilized by year, regional submarket, building size ranges, clear-height levels, and multi-tenanted buildings. Florida’s industrial development boom has supported some of the industry’s top sales and highest transaction pricing to date which are highlighted for each market. 

Industrial assets built throughout Florida between 2016 and 2022 have led to record-setting development totals never seen in the state’s history. One key measurement of the success of new supply is property stabilization rates. Assets are considered stabilized once 90.0% of the building’s rentable square footage is leased. Over the past eight years, Jacksonville and Miami ranked as the top two markets in Florida to stabilize in the shortest period of time. Jacksonville with an average of 1.5 quarters to stabilize leads the state, while Miami trails shortly behind averaging 2.0 quarters. The Tampa market rounded out the top three with an average of 2.7 quarters, while the Orlando market saw an average of 2.9 quarters for stabilization. The Fort Lauderdale market had an average of 3.8 quarters. 
Florida began preparing for the industrial boom over a decade ago with infrastructure growth projects at the ports and with rail transportation in preparation for the expansion of the Panama Canal. That, coupled with the unforeseen and expedited rise of e-commerce resulting from the global pandemic, pushed industrial into “the golden child” spotlight of the commercial real estate industry. Since then, Florida’s robust population growth and pro-business and low tax policies have catapulted record demand growth, booming development, and limited supply of available industrial space in key markets. 
Florida construction activity remained strong at mid-year 2023, with more than 25.8 msf of new high-end industrial projects underway throughout the key markets. The Miami market led the charge with 31.8% of its 5.7 msf under construction already pre-leased. Tampa follows closely behind with 27.1% pre-leased of its 5.4 msf underway. All other markets are averaging 10.0% to 20.0% pre-leased.  


Over the past eight years, sales volume and average price per building square foot spanning from 2016 to 2023 continued to increase, offering valuable insights into Florida's real estate market. The sales volume has displayed a consistent upward trend, commencing at $798 million in 2016 and soaring to a noteworthy $3.63 billion by year end 2022. Notably, the average price per square foot also experienced significant increases as well during this duration, finishing 2016 at $117.60 psf and peaking at an impressive $178.33 in 2022. These figures indicate continued demand from investors in Florida's industrial segment. For 2023, higher interest rates have impacted the selling of properties, as they make borrowing more of a challenge, reducing the buying-pool of investors able to purchase sought-after industrial properties throughout the state. 
At mid-year 2023, all Florida markets maintained their high occupancy rates with an average of only 3.2% vacancy across the state. The high level of leasing demand 
positions Florida as a top contender amongst the Southeast region. Remaining available space under construction continues to be a necessity as limited supply persists and magnifies the need for a large quantity of industrial space to enter the construction pipeline. 


Following the historic records set during the industrial boom, we are entering a more normalized market for the remainder of 2023 and 2024. These slowdowns are no cause for concern and are a natural correction to the record setting and robust market activity we have experienced over the past five years. Looking ahead, we can expect more moderate growth across the state with healthier conditions remaining in key gateway port markets such as Miami and Jacksonville. 

Gian Rodriguez, Managing Principal, South Florida: Scarcity of well-located developable industrial land, healthy lease absorption and rent growth statistics, along with the continued influx of new residents to the state and region has well-positioned Florida’s key industrial markets. Trey Carswell, Managing Director, Tampa: Despite economic headwinds, tenant demand throughout central Florida remains sturdy. We are tracking over 14 msf of tenant requirements, which far exceeds supply. For that reason rental rates will continue to increase. Tyler Newman, Executive Director, Jacksonville: Jacksonville has been on an upward trend for many years and so far in 2023 indicates has continued. The market will deliver more than eight msf this year and current tenant demand indicates the much of the new space will be full by the end of the year. Rental rates will most likely increase but still be the cheapest option in Florida, making NE Florida an attractive option.  

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