America's Property Tax Advisor

Rising South Florida Industrial Rents Push Assessments Up

BY TONY GARCIA, CMI, FORT LAUDERDALE, AUGUST 2022

Industrial landlords in Miami-Dade County increased asking rents by more than $1 per square foot in the second quarter compared to the same period last year. Meanwhile, Broward and Palm Beach industrial owners raised rents by $3 year-over-year, according to a Cushman & Wakefield report. In all three counties, the vacancy rate dropped below 4%.

 

Going forward, the statistics are going to support higher assessed values and higher property taxes. Appeal reviews should be considered by all property owners.

 

Miami-Dade County

 

Tight market conditions and elevated demand levels continue to exert substantial pressure on asking rents in Miami-Dade. The average asking rent went up 14% from $9.28 per square foot to $10.86.

 

The industrial vacancy rate hit a record low of 2.3% in the second quarter, compared to 3.4% during the same period last year.

 

Miami-Dade industrial buildings are being hit with significant value increases of 20%-50%.

 

Broward County

 

The lack of space in the market allowed rent hikes that the market hasn’t experienced before in Broward County. Average asking rents jumped to $13.02 a square foot in the second quarter. During the same time last year, they were $10.05 a square foot.

 

Broward County saw a dramatic drop in the vacancy rate year-over-year to 3.7% from 6.6%. Assessed values are up 10%-15% for industrial properties.

 

Palm Beach County

 

Landlords are so confident that demand is outpacing supply of existing and newly built industrial buildings, that the average asking rent jumped 20% in the second quarter to $13.19 a square foot. Last year, during the same period, Palm Beach County landlords were asking an average of $10.55 a square foot.

 

The Palm Beach industrial vacancy rate fell to 3.6%, compared to 4.1% during the same period last year.

 

Assessed values are up at least 10% for most industrial properties.

 

Rents Will Keep Climbing

 

It is safe to say that widespread elevated rent growth is here to stay for the next few quarters and rents will continue to trend higher over the next couple of years, according to the Cushman & Wakefield report.

 

Analysts believe asking rents will stay the course with positive growth for the remainder of 2022 and beyond. Over the next couple of years, industrial rent growth is forecast to decelerate from double-digit rates but remain robust.

 

2022 proposed assessments are currently being sent to property owners with most appeal deadlines falling in mid-September.

 

Current statistics could support even further assessment increases for next year so minimizing assessed values for industrial properties will be a long-term challenge.