MARKETVIEW

Florida Industrial, Q4 2015

Demand for industrial space is

expected to fuel deliveries in 2016
Total Vacancy

Lease Rate

Net Absorption

$5.67 PSF

6.1%

Completions

2.8 MSF

1.5 MSF

*Arrows indicate change from previous year.

Figure 1: Under Construction and Completions

10

Under Construction (MSF)

Construction Completions (MSF)

8
6
4
2
0
2010

2011

2012

2013

2014

2015

Source: CBRE Research, Q4 2015.

Statewide deliveries in 2015 were at the

highest levels since the Great Recession.
E-commerce users will continue to boost
development in Central Florida.
Leasing fundamentals improved across all
Florida markets year-over-year.
In 2015, investment sales totaled over $1.8
billion, surpassing 2014 by $75 million.
Single family home construction increased
10% year-over-year, a trend that is expected to
continue in 2016.

Q4 2015 CBRE Research

DE V E L OPMEN T

In 2015 over 8 million sq. ft. of industrial space

was added in Florida markets, the highest annual
rate of completions since the Great Recession. The
2015 total is 20% higher than the reported 2014
deliveries. North Florida markets - Jacksonville,
Orlando, Tampa and Polk County added the
majority of the deliveries (4.2 million sq. ft.),
accounting for 53% of the statewide total. Orlando
contributed over 2.3 million sq. ft. with the
notable completion of the Publix distribution
center (1 million sq. ft.) and two build-to-suit
warehouses totaling 700,000 sq. ft. in the Bent Oak

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M A R K E T V I E W FLORIDA INDUSTRIAL
Figure 2: Market Statistics
Market*

Total
Inventory
(SF)

Total
Available
(%)

Total
Vacancy
(%)

Q4 2015 Net
Absorption
(SF)

2015 Net
Absorption
(SF)

2015
Completions
(SF)

Under
Construction
(SF)

Avg. Asking
Lease Rate
($/SF/NNN)

Miami

208,612,810

5.4

3.4

1,098,668

3,184,742

1,815,539

505,493

5.85

Broward

92,239,325

8.8

6.2

106,137

1,538,605

1,018,576

341,058

7.64

Palm Beach

45,283,239

6.9

3.9

361,268

1,415,463

995,634

475,250

8.45

135,547,621

11.5

6.4

620,712

1,632,389

600,482

236,500

5.52

38,926,004

10.7

8.3

165,886

586,903

959,400

1,665,120

4.77

108,991,414

13.7

9.4

6,055

2,573,404

2,311,880

430,703

5.62

97,880,855

12.9

7.8

421,602

1,444,308

367,546

745,630

4.12

Total State of Florida

728,481,268

9.6

6.1

2,780,328

12,375,814

8,069,057

4,399,754

5.67

Total South Florida

346,135,374

6.5

4.2

1,566,073

6,138,810

3,829,749

1,321,801

6.86

Total North Florida

382,345,894

12.4

7.8

1,214,255

6,237,004

4,239,308

3,077,953

5.1

Tampa
Polk
Orlando
Jacksonville

Source: CBRE Research, Q4 2015.

Industrial Park. The South Florida markets
Miami, Broward and Palm Beach - contributed 3.8
million sq. ft. in deliveries. The Miami and
Broward County markets each delivered over 1
million sq. ft. In Miami, 15 building completions
totaled 1.8 million sq. ft. Six of the Miami
buildings were completed as part of the Flagler
Station industrial park. In Broward, 10 buildings
were delivered adding 1 million sq. ft. to the
statewide total for 2015.
Space under construction stood at 4.4 million sq.
ft. at the close of 2015. Known speculative projects
accounted for 67% of total space under
construction and known build-to-suit projects
accounted for an additional 25%. North Florida
markets led with nearly 3.1 million sq. ft. under
construction, of which 1.7 million sq. ft. was
located in Polk County.
Demand will sustain statewide deliveries into
2016. Leasing fundamentals continue to
strengthen throughout the state and build-to-suit
completions are expected to increase significantly
in 2016. Build-to-suit projects are particularly
abundant in Central Florida, where e-commerce
companies are building massive distribution
centers to capitalize on supply chain efficiencies
afforded by the central location.
Q4 2015 CBRE Research

* Market definitions provided on Page 7.

L E AS I N G AC T I V I TY

Florida markets exhibited across-the-board

improvement in leasing fundamentals. At the
close of the fourth quarter statewide vacancy stood
at 6.1%, a 100 basis point (bps) improvement yearover-year. Vacancy in each of the Florida markets
improved over the previous year, a trend that is
expected to continue, particularly in North Florida
markets where the fourth quarter rate stood at
7.8%, a 130 bps decrease. South Florida markets,
which started to see space tightening ahead of
North Florida, reported fourth quarter vacancy of
4.2%, a 70 bps decrease.
Net absorption totaled nearly 12.4 million sq. ft.
for the year. The 2015 total did not exceed 2014
levels, largely due to the more than 2 million sq. ft.
of build-to-suit deliveries in 2014, which
significantly contributed to net absorption that
year. In 2015 there was only one build-to-suit
delivery impacting absorption, totaling 1 million
sq. ft. Looking ahead, deliveries of speculative
projects currently under construction are expected
to facilitate growth in leasing and significantly
bolster net absorption in 2016.
At the close of 2015, average asking lease rates
improved in each of the Florida markets on a year 2016 CBRE, Inc. |

M A R K E T V I E W FLORIDA INDUSTRIAL

over-year basis. In Q4 2015, statewide lease rates

increased 3.7% year-over-year. Asking rent gains in
South Florida markets were incremental,
increasing less than 1% in the fourth quarter. In
North Florida markets, Q4 2015 lease rates
increased by 6.9% year-over-year. Lease rates in
North Florida markets are still relatively low, and
with more room for growth, these rates are
expected to continue to increase in 2016.
Florida markets are particularly attractive to
industrial space users. The state stands to benefit
from the growth of e-commerce, freight
transportation and delivery service companies.
The tremendous growth of the retail sector has
and is expected to continue to influence the
industrial landscape statewide, particularly in
Central Florida, the location of recent build-to-suit
projects by notable e-commerce companies.
Port improvements are also expected to positively
impact Floridas industrial sector. According to the
Florida Ports Council, the states ports anticipate
over 5 million twenty-foot equivalent units (TEUs)
during the 2018/19 fiscal year, nearly 2 million
more than reported for the 2013/14 fiscal year. At
least some of the projected increase in volume is
expected to come as a result of the completion of
the Panama Canal widening, scheduled for Q2
2016. Capital improvements at Floridas 15 ports
totaled nearly $1 billion during the 2014/2015
fiscal year, according to the summary of individual
port plans from the Florida Ports Council.
Investment during the next five years is expected
to total over $3.5 billion, with 37.2% allocated
towards channel and harbor deepening projects
and another 20.8% allocated to cargo terminal
berths and equipment. Increased container traffic
subsequent to the completion of the Panama
Canal is not anticipated to occur immediately.
Rather, shipment volumes are expected to grow
gradually over several years.
INVESTMENT ACTIVITY

Sales volume in 2015 exceeded 2014 levels in terms

of total investment dollars. The year finished with
Q4 2015 CBRE Research

Figure 3: Total Vacancy vs Average Direct Asking Lease Rate (NNN)

12

Asking Rate ($/SF)

6

3
Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015

Vacancy Rate

Average Asking Lease Rate

Source: CBRE Research, Q4 2015.

Figure 4: Net Absorption (MSF)

16

12

0
2010

2011

2012

2013

2014

2015

Source: CBRE Research, Q4 2015.

over $1.8 billion in total sales in 368 transactions
for tracked properties 10,000 sq. ft. and greater.
The 2015 sales volume total increased $75 million
over the previous year. On average, there were
fewer sales in 2015 (368) than in 2014 (519), but
the buildings sold have been larger. Approximately
55% of dollar volume occurred in South Florida
markets, where there were 235 sales with an
average building size of 50,000 sq. ft. In North
Florida there were 133 sales tracked that averaged
120,000 sq. ft. in size.
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M A R K E T V I E W FLORIDA INDUSTRIAL

According to Real Capital Analytics, cross-border

capital accounted for 42% of Florida transactions
by dollar volume, private buyers accounted for
33%, institutional buyers accounted for 9%,
publically traded REITs accounted for 8% and
users/other buyers accounted for the remaining
8%. Data from the past 12 months shows that
investors from Singapore, Norway and Canada
were the most active sources of cross-border
capital entering Floridas industrial markets.

Figure 5: Sales Volume (Billions of $)

ECONOMIC INFLUENCE

Source: CBRE Research, Q4 2015.

Floridas economy remained strong amid tapering

consumer sentiment in December. Unemployment
continued to trend down. As of December the
seasonally adjusted unemployment rate was 5.0%
for both the state and the nation. Statewide
unemployment decreased 70 bps and the national
rate declined 60 bps year-over-year. Statewide job
creation remained strong with 233,100 jobs added
over the past year for a growth rate of 2.9%. Job
growth at the state level exceeded the national
increase of 1.9%. The state job growth was in part
attributed to 43,800 new leisure and hospitality
jobs (a 3.9% increase), 39,600 new trade,
transportation and utilities jobs (a 2.4% increase),
and 28,500 construction jobs (a 7.0% increase).

Figure 6: Sales Volume by Market

0
2010

According to the Florida Realtors Associations

December 2015 single-family home sales data, the
states housing market closed the year on a
positive note. After a sluggish November, home
sales ticked back up in December, increasing
27.4% month-over-month and 2.9% year-over-year.
Meanwhile, the inventory of existing single-family
homes for sale tightened in December to 4.3
months supply, down 16.8% from December
2014. The uptick in sales and tightening of
inventory pushed the median number of days on
the market down 13.0% year-over-year to 47, and
allowed sellers to achieve a strong list price to sale
price ratio of 94.2%. The median sale price
increased to $206,500, the highest pricing in the
past five years and an 11.6% year-over-year gain.

Q4 2015 CBRE Research

2011

2012

2013

2014

2015

2015

# Deals

Volume ($)

Total SF

$ Per SF

Miami

91

435,037,725

5,320,252

82

Broward

93

429,226,902

4,681,415

92

Palm Beach

51

126,761,495

1,651,895

77

Tampa

33

92,919,000

2,289,830

41

27,975,340

1,262,521

22

Orlando

60

292,698,516

5,776,186

51

Jacksonville

33

397,966,077

6,836,345

58

368

1,802,585,055

27,818,444

65

Polk

State of Florida

Source: CBRE Research, Q4 2015.

Floridas population surpassed 20 million
residents in 2015, and is expected to continue on a
rapid growth trajectory for the foreseeable future.
This growth, coupled with job growth and
increasing availability of mortgage loans, is
expected to drive strong housing demand in 2016.
In response to this demand, and the dwindling
supply of existing single-family homes,
homebuilders have leapt into action. Thousands
of housing units are in the planning and
permitting stages. According to data from the U.S.
Census Bureau, Floridas permit volume (by unit)
for single-family homes rose 10% in 2015, a
significant increase after a marginal annual gain
of only 2% in 2014. According to the Dodge Data
2016 Construction Outlook, home construction is
expected to increase through this year as well.
Even with the increase in construction there is
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M A R K E T V I E W FLORIDA INDUSTRIAL
Figure 7: Single-Family Housing Units
(000s of Units)
250
200
150
100
50
0

Source: U.S. Census Bureau, January 2016.

little risk of oversupply, as permit levels are well
below the previous peak in 2005.
According to preliminary estimates by VISIT
FLORIDA, the state received a record 101 millionplus tourists in 2015, over 5% more than in 2014.
With nearly 1.1 million jobs related to tourism, the
state of Florida benefits tremendously from the
growth of this industry.
According to the University of Floridas Bureau of
Economic and Business Research, consumer
sentiment fell one-tenth of a point in January to
91.5, 1.6 points below the reading in January 2015.
Analysts at the Bureau point to the recent drop in
the stock market and the deterioration of the
Chinese economy as two factors contributing to
declining short and long term improvement
expectations in the U.S. economy. As inflation is
impacted both by unemployment and the cost of
energy, uncertainty remains as to how the Federal
Reserve will respond with rate adjustments
moving forward. Despite consumer caution, gas
prices remain low, which will certainly benefit
Floridas households and retail sector in 2016.
OU T L OOK

Floridas industrial market maintained strong

growth in 2015. Demand for industrial space,
particularly in Central Florida, will fuel new
construction in 2016. The growth and
improvement of Floridas ports will augment the
states supply chain infrastructure and make the
state more attractive to industrial space users, and

a large concentration of consumers will continue

to make Florida a prime location for e-commerce
distribution facilities.
Going into 2016, forecasts project statewide
growth in jobs and incomes. A leading metric for
overall job growth, total non-farm employment, is
expected to grow 2.3% in 2016, according to the
University of Central Floridas Florida & Metro
Forecast. An alternative forecast published by
Kiplinger has an even more optimistic view,
predicting that Florida will be ranked 3rd out of
the 50 states in terms of job growth, with nonfarm employment increasing 2.9% in 2016 and
unemployment dropping to 4.7%. Along with
statewide job growth, UCFs Florida & Metro
Forecast predicts personal income in Florida will
increase 4.8% in 2016, outpacing income growth
nationwide.
Figure 8: Labor Market Statistics (Non-seasonally Adjusted)
County/MSA

Jacksonville MSA

Labor Force

Employment Unemployment

Unemployment
%

716,665

684,660

32,005

4.5

Orlando MSA

1,222,042

1,169,073

52,969

4.3

Tampa MSA

1,438,980

1,374,969

64,011

4.4

Palm Beach

687,900

657,040

30,860

4.5

Broward

999,633

956,378

43,255

4.3

Miami-Dade

1,333,597

1,256,677

76,920

5.8

Florida

9,630,000

9,173,000

457,000

4.7

Florida (SA)

9,667,000

9,180,000

487,000

5.0

United States

157,245,000

149,703,000

7,542,000

4.8

United States (SA)

157,833,000

149,929,000

7,904,000

5.0

Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2016.

Q4 2015 CBRE Research

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M A R K E T V I E W FLORIDA INDUSTRIAL

Figure 9: Top 10 Projects Under Construction as of 12/31/2015

Market

Property Name

Address

Polk
Polk
Jacksonville
Polk
Palm Beach
Polk
Jacksonville
Palm Beach
Miami
Polk

Park 27, Building III

Four Corners Business Park, Building 200
Ja-Ru
FedEx
Boutwell Business Center
Lakeland Logistics Center
Westside Industrial Park
Duke Realtys Turnpike Crossings
107th St, Building 7
Park 27, Building IV

230 Deen Still Rd, Davenport

Homerun Blvd, Davenport
12901 Gran Pkwy, Jacksonville
Waverly Barn Rd, Davenport
Lake Worth Rd, Lake Worth
2011 W Memorial Blvd, Lakeland
4948 Bulls Bay Hwy, Jacksonville
Jog Rd & Belvedere Rd, West Palm Beach
11421 NW 107th St, Miami
210 Deen Still Rd, Davenport

Building SF

414,032
394,513
352,677
310,000
250,000
245,000
237,000
225,250
202,093
188,995

Source: CBRE Research, Q4 2015.

Figure 10: Top 10 Deliveries in 2015
Market

Property Name

Address

Building SF

Orlando
Palm Beach
Orlando
Polk
Jacksonville
Palm Beach
Orlando
Tampa
Broward
Miami

Publix Distribution Center

ALDI Distribution Center
Bent Oak Industrial Park, Building 100
Central Florida Intermodal Logistics Cnt, Bld E
FedEx
FedEx Ground
Bent Oak Industrial Park, Building 200
GE Center of Excellence
Bridge Point Marina Mile
Flagler Station, Building 37

7350 S Hazeltine National Dr, Orlando

1171 State Rd 7, Royal Palm Beach
1801 W. Boice Pond Rd, Orlando
100 Intermodal Dr, Winter Haven
13564 Waterworks St, Jacksonville
460 Pike Rd, West Palm Beach
1701 W. Boice Pond Rd, Orlando
1925 Calumet St, Tampa
3400 SW 30th Ave, Ft. Lauderdale
9375 MW 117th Ave, Medley

1,000,000
650,000
483,080
407,400
297,246
250,000
220,840
190,000
189,620
179,543

Source: CBRE Research, Q4 2015.

Figure 11: Top 10 Sales in Q4 2015
Market

Property Name/Address

Buyer

Building SF

Price ($)

Jacksonville

Samsonite Corp/10480 Imeson Park Blvd

Griffin Capital Essential Asset REIT

817,000

48,000,000

Jacksonville

Tech Packaging/11902 Central Pkwy

Abu Dhabi Investment Authority/PSP Investments

891,063

40,410,000

Orlando

CVS Distribution Center/8201 Chancellor Dr

Kinsey Equities LLC

740,260

35,500,000

Broward

16000 Pines Blvd

City of Pembroke Pines

345,377

17,880,000

Broward

ProLogis Park/4050 NW 126th Ave

Exeter Property Group

194,746

16,450,000

Broward

Davie Park of Commerce/2240 SW 70th Ave

Tavjaz, Inc.

187,352

14,500,000

Miami

Airport East Distribution Ctr/7000 NW 32nd Ave

Terranova Corporation

400,000

12,750,000

Broward

2200 W Sunrise Blvd

Bridge Development Partners, LLC

45,509

12,450,000

Tampa

Hunter Douglas/3001 Gateway Centre Pkwy

Gramercy Property Trust

128,643

11,100,000

Palm Beach

Okeechobee Business Park/1510 Latham Rd

Ym 26 Flex, LLC

62,715

9,000,000

Source: CBRE Research, Q4 2015.

Q4 2015 CBRE Research

2016 CBRE, Inc. |

M A R K E T V I E W FLORIDA INDUSTRIAL

Jacksonville
Inventory
97,880,855

Orlando

Polk
Inventory
39,926,004

Inventory Size
+ 200 million sq. ft.
100 200 million sq. ft.
50 99 million sq. ft.
Below 50 million sq. ft.

Vacancy % Asking Rate

7.8
$4.12

Inventory
108,991,414

Vacancy % Asking Rate

8.3
$4.77

Vacancy % Asking Rate

9.4
$5.62

Tampa
Inventory
135,547,621

Vacancy %
6.4

Asking Rate
$5.52
Palm Beach
Inventory
45,283,239

Vacancy % Asking Rate

3.9
$8.45

Broward
Inventory
92,239,325

Vacancy % Asking Rate

6.2
$7.64

Miami
Inventory
208,612,810

Vacancy % Asking Rate

3.4
$5.85

Market Coverage: Includes all competitive industrial buildings 10,000 sq. ft. and greater in size in Jacksonville (Clay, Duval
and St. Johns Counties), Orlando (Orange, Osceola and Seminole Counties), Tampa (Hillsborough and Pinellas Counties),
Polk County, Palm Beach County, Broward County and Miami-Dade County.
CONTACTS

Shanna Drwiega
Senior Research Analyst
+1 813 273 8433
Shanna.Drwiega@cbre.com
Abu I. Mansoor
Senior Research Analyst
+1 954 331 1733
Abu.Mansoor@cbre.com
Quinn W. Eddins
Director, Research and Analysis
+1 305 428 6325
Quinn.Eddins@cbre.com

To learn more about CBRE Research,

or to access additional research reports,
please visit the Global Research Gateway at
www.cbre.com/researchgateway.

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy,
we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness.
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