Currently the Fort Lauderdale, Florida, industrial market is suffering from an excess of space, particularly in the southwestern Broward markets, which include Miramar Park of Commerce, Seneca and Port 95. Construction has slowed considerably, absorption is off and rates are flat. However, the greater Fort Lauderdale market is expected to recover in the third or fourth quarter and continue to rebound into 2003, according to Adam Von Romer, CCIM, senior investment associate/sales trainer with NAI Rauch, Weaver, Norfleet, Kurtz & Company in Fort Lauderdale.

The recent bankruptcy of a cruise line in the market as well as the demise of Lucent Technologies has left a large amount of big block space available in the southwestern Broward area. Large tenants are being very cautious about committing to large blocks of space and have decided to sit on the sidelines for a while to see if the recession is truly over before committing to new large spaces. Recently Motorola put its research and development site on the market; the 555,000-square-foot facility sits on 86 acres in Palm Beach County and Motorola hopes to sell for around $33 million.

The vast majority of the industrial development is occurring in the south and western portions of the county. "This is due to the fact that there are no large tracts of land in the county, and the surface roads in the balance of the county simply cannot support the traffic generated by the heavy uses associated with industrial developments," says Von Romer.

Recent leases include Gold Coast Beverage's 60,500-square-foot lease at 1201 NE 38th St. in Fort Lauderdale, Alliance Entertainment's lease of 46,752 square feet at 4150 NW 120th St. in Coral Springs and the 40,624-square-foot lease by Gautier USA at the Sample 95 complex. Most of the lease activity has involved smaller spaces, which range from about 10,000 square feet to 25,000 square feet.

Rental rates range from approximately $5.25 to $5.50 per square foot, triple net for bulk warehouse, to about $9 per square foot for flex warehouse. Vacancy rates are hovering around 9 to 10 percent.

"The area to keep an eye on is the southwestern Broward market," says Von Romer. "It has good population growth, good surface roads and linkages to all the major arteries. It is close to the airports and Port Everglades. It is also the only place where there is any land to build on."

Overall, the industrial market in Fort Lauderdale and Broward County is down but not out. "We have lost a few major tenants in the market and the economy has softened slightly overall, but we still have a number of very strong positives," Von Romer notes.

Demand for industrial space is driven by population growth and Broward County is expected to grow by almost 1 million people over the next 20 years. With continued demand, the scarcity of land will increase the value of industrial space.

Broward County is the second busiest port for the export of goods to South and Central America and the Caribbean. "We have seen downturns before in the market," Von Romer concludes, "but the fundamentals remain strong for a full recovery and continued prosperity in the industrial market."

Adam Von Romer, CCIM, is senior investment associate/sales trainer with NAI Rauch, Weaver, Norfleet, Kurtz & Company.


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