Miami's Industrial Market: A Strategic Hub for Logistics and Trade.
The Miami industrial market continues to demonstrate its importance as a strategic hub for logistics and trade. In this newsletter, we present an analysis based on the latest market report, highlighting key trends and opportunities that directly impact the industrial real estate sector in our region.
Miami's industrial real estate market has seen significant changes, with net absorption dropping to -750,000 SF, raising the vacancy rate from 2.0% in 2022 to 5.4% in early 2025. Tenant demand is slowing, and rent growth has moderated after a sharp rise of 31.9% over three years. Despite these challenges, Miami remains a vital logistics hub with strong international trade links through its airport and port. Supply constraints, driven by geographical barriers like the Everglades, keep vacancy rates below the U.S. average, and rent growth is expected to pick up by 2026. Meanwhile, rising interest rates have aligned sales volumes with pre-pandemic levels, with notable acquisitions continuing.
LEASING
Miami's industrial market experienced slower growth in the second half of 2024, with net absorption declining to -750,000 SF over the past year, driven largely by new deliveries of large properties.
Notable developments include Countyline Corporate Park and Palmer Logistics Center, with Amazon occupying 1 million SF. Vacancy rates have increased to 5.4% in early 2025, but Miami maintains lower vacancies than the national average due to limited industrial inventory.
Tenant preferences favor newer, larger properties, exemplified by Iberia Foods relocating to a modern facility with greater capacity. In contrast, older assets faced negative absorption, with companies like Imperial Dade reducing their footprint.
While large warehouse demand softened due to rising supply and moderating 3PL activity, small bay industrial spaces (10,000–50,000 SF) remain highly sought after, with quick leasing times under three months. Industries like hospitality, tourism, and food continue to drive demand for smaller spaces, as shown by Rosetta Bakery's recent lease.
Despite current vacancy expansions, the market is projected to stabilize in 2025 as supply waves subside, keeping Miami’s industrial sector resilient.
RENT
Tenant demand has driven Miami's industrial rents to record highs of $21/SF, among the highest in Florida, with a 60% increase since 2019, far outpacing the U.S. average of 38%.
Smaller properties under 100,000 SF command higher rents ($21/SF) than larger spaces, with rates influenced by factors such as asset age and clear height.
Newer, larger properties built since 2016 offer lower rents around $16/SF due to their location in less dense areas.
Rent growth has slowed to 2.8% in early 2025, down from 17% in 2022, yet tenant renewals are seeing rents double. Limited availability keeps most tenants renewing leases despite rising costs.
Miami's supply constraints will continue to drive rent growth, projected to average 5% annually through 2028, surpassing the U.S. average of 4.6%. Vacancies are expected to stay below the national average, peaking at 5% in the short term.
SALES
Total Sales: Industrial sales volume in Miami reached $1.9 billion over the past 12 months, consistent with the five-year average, although major deals (> $40M) dropped to four in 2024 compared to an annual average of eight over the past three years.
Highlighted Transactions:
As we begin 2025, the Miami real estate market continues to show resilience and growth, presenting promising opportunities for both investors and homeowners.
From 2020 to 2022, Miami-Dade County saw a historic influx of new capital, totaling over $9.5 billion, driven by high-income residents relocating from the Northeast and West, contributing to a strong local economy. Employment growth has outpaced the national average, fueled by the creation of new high-paying office jobs.
In terms of housing, the median sales price for single-family homes in Miami-Dade rose by 3%, indicating sustained demand, although the market is showing signs of cooling with a nearly 10% drop in Miami home prices, attributed to rising inventory and mortgage rates. Despite recent fluctuations, the Miami real estate market remains dynamic, with the luxury housing sector continuing to thrive. For example, Waldorf Astoria Residences secured a record $668 million construction loan, underscoring the city's appeal to high-level investors.
Looking ahead, affordable housing remains a critical priority, with the University of Florida reporting a need for around 116,000 affordable units by 2030, highlighting the importance of strategic development in this sector.