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Doral’s commercial real estate market continues to grow as the city welcomes new tenants and office spaces are redeveloped.
On the industrial side, which in Doral is called Miami Airport West, asking rates on market rents are up when comparing December 2023 to December 2022, said Carlos Villanueva, managing broker at The Keyes Company. “The average asking rent is $22.72 per foot. We found that rent growth in the industrial sector is 8.4% year-on-year.
The Doral market is strong because there is constant demand in the city.
“Doral, when you look at industrial pricing, it’s definitely top of the market, in Southeast Florida, top of the market in Florida and probably top of the market in the entire Southeast,” said David Wigoda, senior vice president of CBRE. “Sales in Doral would include everything from condominiums of a few thousand square feet to large-scale business parks. If someone owns a property in Doral and they need to sell, this is a market where there is always liquidity because whether they are a buying user or a buying investor , there is always a demand for a product in Doral.
Doral office market rents increased year over year in December 2023, Mr. Villanueva said. Asking rents are approximately $40.72 per foot, representing 5% year-over-year rent growth.
“We have seen a decline in the vacancy rate, so offices across the country have been greatly impacted during the pandemic,” Mr. Villanueva said. “As employees bit into the forbidden fruit of working from home… you saw vacancy rates increase. However, Doral is reversing this trend. Their vacancy rate is down, still high, relatively speaking, at 11.4% of vacant space, but we’re seeing that the net absorption, which is how many square feet we have actually absorbed over the last six to 12 months, the essentially leased space was 145,000 square feet in this general area.
“The asset value of this market is around $6 billion,” he said. “It extends a little outside of the Doral core, but is generally primarily concentrated in Doral, and the inventory stands at approximately 21.9 million square feet of office space.”
Other professionals in the field have noticed the impact of working from home on the demand for office space.
Working from home has reduced the demand for large offices. This has resulted in higher land values with different uses in some cases, said Andrew Easton, Easton Group office vice president.
“Doral as a whole is demolishing a lot of office space, which we think will create more demand in the long term, just because of the supply and demand factor,” Mr. Easton said. “We think the Doral market is strong.”
Over the past five to 10 years, demand for commercial real estate has increased in Doral, Mr. Wigoda said. “One of the factors driving this demand is the residential market. “Doral has seen a disproportionate number of housing starts, which means developers are building, whether single-family homes, townhomes or multi-family complexes in Doral in particular…
“Over the past few years,” Mr. Wigoda explained, “a number of office buildings have been purchased with a business plan to demolish them and develop more housing. Residential is really what we need to support the commercial markets.
This trend of transforming offices into housing was born from the idea of finding the best use of land.
“What we see is this: on buildings located in certain strategic locations where vacancy factors are high, repurposing the building does not make sense. Being able to consider the highest and best use of the land appears as multifamily,” Mr. Villanueva said. “There’s a big project just west of 87th Avenue that used to be office space for a pharmaceutical company. They have since left this area. They’ve now redeveloped it and it’s a great multi-family complex.
Commercial real estate also includes the retail market.
Asking rent for the retail market in Doral in December 2023 averaged $45.13 triple net, Mr. Villanueva said.
“We’re seeing retail vacancy rates in Doral, and Doral is a very attractive market for retail,” Villanueva said. “There is its daytime population who come to work. There is also a long-time population that lives in Doral, so they live, work and play there.
Because Doral has or is near destination locations, a low vacancy rate of 3.1 percent has been created and is declining, Mr. Villanueva said.
“We see about 17,000 square feet under construction. Not much construction, as land is becoming very scarce in Doral. However, last year, 225,000 square feet of retail space was absorbed or leased in Doral, making it a very strong retail market or submarket, and the total inventory in the square footage reserved for retail is 14 million square feet. This is very significant and the value of the assets is approximately $6.3 billion.
Doral has many aspects that attract investors, Mr. Wigoda said. “One of them is, I think, quality of life. Doral has truly established itself as a place where people want to move to work, live and play. Over the last 10 or 15 years, Doral has created more retail, more restaurants, more lifestyle type amenities that have attracted more residents, and I think the fact that Doral continues to grow, I think it’s a snowball effect. As people move there and amenities expand, more developers build…and attract more people there.
Additionally, CBRE arranged the sale of industrial property in Doral for $17.5 million.
“The property we sold was originally built as a manufacturing building,” Mr. Wigoda said. “A few years later, another building was built on the same site as another production building, and a few years later the buildings were connected together.
“Fast forward… our client, who was the seller, purchased what was once an old manufacturing plant about 20 years ago and he recognized that in the Doral market, that market had grown and evolved into a very sophisticated and diverse market that attracts everyone. different types of users and he recognized that in this market there were different users who would pay higher rent if the property was improved.
During the seller’s tenure, it was decided to add new glass storefronts, improve landscaping, add parking, upgrade electrical, and overall convert it to a modern 21st century distribution center or a modern industrial center, Wigoda said.
“When we put the property on the market, there were about 10 tenants in the building and they ranged from a company that did logistics, which is a very common use in Doral, to a pharmacy, it “There was a full-service blood laboratory, as well as some sort of non-traditional industrial uses, like a call center, and then there was actually a church at the end of the buildings as well,” Mr. Wigoda said. .
“The building is undoubtedly an excellent representation of a cross-section of tenants and uses attracted to being in Doral,” he said.
The location of the building also played a role.
“The building is right off 25th (Street), just north of 836,” Mr. Wigoda said. “From this location, you can actually travel north, south, east or west throughout Miami-Dade and Broward counties in no time. Your access to the toll highway, your access to the 95… is done in a few minutes.
“When tenants are looking at where they want to locate their business,” Mr. Wigoda said, “logistics traffic patterns and highway access are all taken into consideration and built around that property.”
The City of Doral is expected to continue its growth.
“Doral is an exceptional market,” Mr. Villanueva said. “It’s a great place to live, work and play. I believe the future is bright for the City of Doral and the Doral market.
