Across the nation, the industrial real estate market has seen a slowdown in the first quarter of 2023, but the overall implications remain positive, according to the NAIOP Industrial report. Florida and its submarkets are no exception to this. Despite the lingering vacancies, however, the market is still experiencing significant leasing activity as the trend towards lower vacancy rates in the future makes Florida an attractive option for industrial real estate investors.
Central Florida Industrial
According to CoStar, over 60% of Lakeland’s vacant square footage can be found in just eight industrial buildings. CoStar also notes that Lakeland's overall vacancy rate would be lower if not for an outsized proportion of 100,000-plus-SF vacancies in the market. In correlation, the average months to lease space in Lakeland has decreased from over twelve months in Q3 of 2021 to now just over two months. Following a brief spike in Q2 of 2023, when roughly 2 million square feet of new space is scheduled to be delivered, the industrial vacancy in Lakeland is expected to trend lower during the second half of 2023.
Some of the largest developers in the industrial real estate market have even slowed down on developing spaces that are 500,000 square feet and above. However, their appetite is still bullish on 150,000 square feet or larger products, with tenants quickly in tow.
Florida's industrial real estate market is still an excellent opportunity for investors to take advantage of the strong leasing momentum and the potential for lower vacancy rates in the future. The state's economic growth is a significant factor in this trend, as Florida is home to one of the fastest-growing economies in the US, with a population growth rate consistently exceeding the national average. This trend is particularly evident with Florida becoming the fastest-growing state at the beginning of 2023.
Investing in Florida’s industrial real estate market requires careful research and analysis. The first step is determining the property type that fits your investment strategy. For instance, those assets above 150,000 square feet could be an excellent opportunity for investors looking for stable, long-term returns. On the other hand, those looking for high-risk, high-reward investments may consider developing spec spaces in smaller sizes.
The next step is to work with a reputable commercial real estate broker specializing in the Florida market. Partnering with one of SVN | Saunders Ralston Dantzler’s reputable industrial real estate brokers can help investors identify potential properties that fit their investment strategy. Don't miss out on the opportunity to invest in Florida's growing industrial real estate market. Contact one of the firm's expert advisors today.