What do semi-trucks and sand wedges have in common? The answer lies in a new type of real estate development combining industrial and retail space within a single project (we call it “indus-retail”), with South Florida poised to be a testing ground for the new trend.
Our region’s industrial landscape is undergoing a transformation thanks to new companies entering the market, a growing population and fast-changing consumer trends such as online-shopping and the rise of subscription-based services – all of which are fueling innovation in an sector long associated with unappealing warehouses.
The amount of industrial space in South Florida has grown by 9 million square feet in the past three years, and another 4.6 million is expected to come online this year, according to a report by global brokerage services firm and South Florida’s industrial brokerage leader, JLL.
“Much the same way South Florida has gained prominence from a cultural, culinary and tourism standpoint, our industrial real estate sector is now considered a top-tier U.S. market,” explained JLL Managing Director Brian Smith in a recent Miami Herald column.
The tri-county area gained nearly 500,000 new residents in the past five years, and the U.S. census forecasts additional growth through 2020. As our population surges, so does the popularity of online shopping. A recent study found that 79% of Americans are shopping on the web or their phones.
These consumers are increasingly demanding faster delivery times and online retailers are working to meet their rapidly evolving needs. Distributors are aggressively leasing warehouse space in major markets in an effort to increase speed and convenience for their customers.
Examples include Amazon’s recent lease of 91 acres in Miami-Dade County and John Deere’s expansion into the market. Amazon has also been increasing their footprint in Central Florida with a mega-distribution center in Orlando.
While all signs point to continued growth, property owners are taking nothing for granted.
Savvy industrial park developers are changing the game by adding retail space to their properties, introducing new amenities and ditching basic aesthetics for smart architectural designs.
Most notably, the owner of Beacon Lakes Industrial Park in Doral recently announced plans to add a retail component that will include dining, shopping and entertainment options, such as Top Golf, intended to meet the needs of its growing tenant base, the Wall Street Journal reported. Beacon Lakes tenants include Amazon, UPS and soon-to-be newcomer Telemundo/NBC Universal, which is building its new global headquarters.
These upgrades are a not-so-subtle move by Beacon Lakes’ owner, Prologis, to stay competitive by accommodating a workforce that’s becoming younger and more invested in the quality of its workplace. And there’s no sign of looming slowdown, according to Brian Smith.
“Our region is attracting the world’s premier tenants, developers and owners, and we’re experiencing never before seen levels of investment in our logistics infrastructure. All of this bodes well for South Florida’s economy,” Smith adds.