Florida Industrial Sector Booms with Record Sales Volume and Development Activity in 2022
The U.S. industrial market has been rapidly growing since early 2020, driven by a surge in e-commerce and construction activity. This has led to a surge in leasing volume and record development activity, resulting in robust sales volume for industrial properties across the nation.
Florida has felt the effects of this growth acutely, with growing investor demand and strengthened industrial market fundamentals. In 2022, nearly 2,300 industrial properties were traded in the state, accounting for a total volume of approximately $12.5 billion. Top buyers included Prologis, Blackstone, and Ares Management, with Duke Realty Corp being the top seller.
Sales volume in the six largest metropolitan areas in Florida, including Miami, Tampa, Orlando, Jacksonville, Fort Lauderdale, and Palm Beach, was up 20% from the previous year. The Miami industrial market, the largest in the state by asset value, saw a 43% increase in sales volume. All of South Florida saw significant investment activity, with Fort Lauderdale and Palm Beach both posting gains of around 30%. In Central Florida, the Orlando industrial market saw a 28% increase in sales volume, offsetting declines in the Tampa and Jacksonville markets.
One of the largest single-property industrial trades in Florida in the past year was the sale of a 1.1 million-square-foot distribution facility in Orlando’s West Industrial Park, fully leased to Amazon, by Miami-based Starwood Capital Group to New York-based Related Fund Management for $115.5 million.
Although leasing volume was down in the six largest Florida markets by more than 10% in 2022 compared to the record leasing achieved in 2021, leasing volumes remain higher than those reported in 2019 and 2020 in most areas. There were more than 4,300 industrial leases signed in these six markets in 2022, with over 40% of them being for spaces larger than 20,000 square feet. The only market to post a gain in overall leasing volume was Palm Beach, while Fort Lauderdale saw the largest decline in the state, down 50%. Miami saw a drop of 16%, followed by losses of 8% in Jacksonville, 5% in Orlando, and 2% in the Tampa industrial market.
Despite the decrease in leasing totals, several deals were signed for spaces larger than 500,000 square feet, including a lease for a 1.2 million-square-foot distribution building in Plant City, Tampa by home improvement retailer Lowe’s. Other top industrial lease deals in Florida in 2022 included a 683,000-square-foot deal with Walgreens in Palm Beach and a 547,000-square-foot lease with Medline in Orlando. Other notable tenants on the list of the 10 largest industrial lease deals in the state included Sealy Mattress Manufacturing Co., Imperial Bag & Co., FedEx Ground, Crown Products, Alta, Dollar General, and FreezPark Logistics.