As population growth continues in Miami-Dale County with no signs of slowing down in the next ten years, the real estate industry will have to adapt and cater to the new demands people are bringing along with them.
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In the industrial and retail real estate market, there are going to be even more specific groups, like technology groups or healthcare groups, breaking into those logistics-type companies on the industrial front, said Jeff Hartsook, the managing principal and head of industrial practice for Cresa Miami.
“Instead of the big box retail route,” he said, “they’re now coming through the big box warehouse, industrial space route, which can be much more cost-effective than what a retail rental rate would be.”
From a supply chain standpoint, it has totally changed how products are getting from the manufacture, though the distribution channels, and all the way to the end-user to our front doorsteps, Mr. Hartsook explained. “That has definitely been a huge play in why the industrial industry has been going so crazy and companies are taking much more industrial space.”
Local companies are doing more of what Target and Whole Foods have already started to do, where they are taking part in their last-mile deliveries, he said.
“You’re seeing a lot more folks coming up where you’re taking your car and you’re parking it out the parking lot and they’re bringing out the product to you,” Mr. Hartsook said. “I don’t see the in-person shopping experience going-away, but I do think that there’ll be a smaller footprint in some of those big box type retailers.”
In ten years the county will be out of warehouse space inventory, he added.
“There was a study that was put out last year that we have basically about seven more years of industrial zoned land left,” he said. “So either the county has to add more land to the urban development boundary or they’re going to have to start converting some older antiquated industrial zoning buildings into the newer 36-foot clearance height industrial buildings."
“If you look at the population growth, you have consumers and more consumers.” Mr. Hartsook said. “Som are you are going to still have these bigger box, large distribution centers? The answer is yes, I think we’re going to continue to see that, but you’re still going to have those last-mile facilities, which are close proximity to those end-user and to those doorsteps."
When it comes to office space the demand is going to continue to be very expensive within the county, added Robert Orban, managing principal for Cresa Miami and head of the firm’s office space practice. “The prime reason is what you’ve seen in other areas that have gotten overly developed and crowded, like Los Angeles or New York, where the prices continue to go up until the point when it can’t anymore.”
Cresa is seeing local clients that have been in Brickell for 25 to 30 years that are on the verge of being priced out by huge international law firms that are relocating here.
“Where the average partner is doing $2 Million to $3 Million worth of business a year, they can't afford to pay $100 a square foot or more,” Mr. Orban said. “A lot of Miami-based domestic companies cannot, so they are looking at other areas and taking less space.”
A trend for these smaller domestic companies, he said, might be relocating away from South Florida up toward the coast or even into Tampa.
“It’s not going to change overnight, ”Mr. Orban added, “but I think we’re going to start to see more redevelopment with older properties that maybe aren’t as densely developed.”