Advertisement
Doral’s prime location continues to drive strong demand for commercial real estate in the city.
“Demand in Doral has been steady for years,” said Conner Milford, senior vice president of Lee & Associates. “I haven’t seen any kind of real decline, significant decline…”
Doral is a prime location because of its proximity to PortMiami and Miami International Airport, Mr. Milford said. “I would say the majority of Class A products delivered to the market are either in Doral or just north of there.”
Doral is probably the hottest market in South Florida, he said.
Likewise, other professionals in the field noted that the city’s growth was closely linked to its centralized location.
“As it relates to the Doral commercial market, it has certainly seen significant growth and development over the past several years,” Carlos Villanueva, district sales manager for the company’s Coral Gables and Coconut Grove offices. Keyes. “The main driver of this is highway access to Miami International Airport, as well as access to the Port of Miami. It truly is an ideal hub when it comes to business.
Local leadership in Doral also contributed to a strong economic base, Mr. Villanueva said. It is certainly fueled by sectors such as logistics, finance, technology, healthcare as well as entertainment.
Additionally, in the office market, demand has been active for office space, including corporate headquarters, Mr. Villanueva said. There “continues to be new office buildings, construction and repositioning of office buildings in the Doral area, particularly around downtown Doral, some along the Doral Boulevard corridor.”
On the retail side, there has been steady growth, Mr. Villanueva said, as well as an increase in consumer spending “because the population (that) has moved to Doral is actually quite wealthy.” You see that shopping centers and mixed-use developments have certainly emerged to meet the diverse needs of residents and visitors.
This situation has been strong for some time due to the different waves of population coming from countries like Venezuela, Colombia, Brazil, Argentina and Mexico, he explained.
Domestic migration from the United States, from places like New York, New Jersey, Connecticut, California and other states, has been a driver, Mr. Villanueva said. “It’s a very diverse population.”
“On the industrial side, due to its access to major transportation, warehousing and distribution facilities, demand continues to be strong throughout Doral as well as even the sister cities north of Medley. So we see demand continuing to increase,” Mr. Villanueva said.
“Two of the main drivers have been e-commerce, so last mile delivery, Amazon has a warehouse actually not too far from Top Golf, it’s a smaller warehouse, but it’s a warehouse that takes care of last mile delivery,” he said, “and then you also needed refrigerated and freezer warehouses for food distribution, including centralized commissaries as well. The industrial market continues to be quite good. absorbed in Doral and it remained very stable.
Prices in the city have also impacted the commercial real estate scene.
“We found that prices stayed pretty much the same for about 12 months,” Mr Milford said. “I think what happened was when interest rates went up, we saw cap rates go up as well; and without the rising rents, we probably would have seen prices drop a bit – as some other markets have – but due to strong rent growth in South Florida, primarily due to limited supply , we’ve seen prices just sort of remain stable.
“So even though cap rates are increasing, we’re still seeing the same price level because of the rental growth that we’re continuing to see,” he said, “even though that’s also slowed down a little bit, but we are still seeing positive growth in rents.
On the industrial side, Mr. Villanueva said, asking rents are just under $23 per square foot and “rents have actually increased year over year on the asking base of 6.8% and we are seeing rates of vacancy less than 5%, 4.7% for industrial sectors. .”
Others corroborate Doral’s position. CBRE lists the average asking rent per square foot in the broader Airport-Doral area at $19.55. Colliers, in its latest market report, estimates rent for warehouse distribution space at $18.48 per square foot, and for flex space at $25.53.
On the retail side, the average asking rent is $45.73 per foot, Mr. Villanueva said. Rent growth increased by 5.5% and “we see that among all asset classes it has the lowest vacancy rate at 2.9%.”
The average asking rent for office space is about $41 per square foot, Mr. Villanueva said. These figures are general, because they depend on the type of building envisaged.
Some of the fastest-growing markets in the United States are seeing rental growth slow or even decline, Mr. Milford said. However, “we don’t see that, mainly because we have the Everglades on one side and the ocean on the other and there’s not a lot of land to keep building on, so l “supply is limited.”
The Doral Commercial Real Estate Marketplace allows users to join the conversation.
“Investors aren’t as aggressive right now because they just don’t have that delta between their interest rate and the cap rate that they’re buying at, and that has allowed users to have a chance to compete to purchase properties that they need,” Mr. Milford said. “I think we’ll see more of that, where users will continue throughout this year to have the opportunity to purchase some of these properties, while. in the past, they probably would have been outbid by investors.”
Milford says this year, users will have the option to come while interest rates are still high. The high interest has cooled investors and allowed users who need the property for their own use and “not only to earn income passively, they have to use it to operate their business and they finally have a chance to compete for these goods. properties without so many investors trying to outbid them.
Users have a need; this has an impact when it comes to deciding to buy.
The mindset of an end user is different from that of an investor, Mr. Villanueva said. End users need to expand or establish their business in a given location.
Opportunities remain for end users, particularly in industrial and office spaces, Mr. Villanueva said. There are also opportunities in retail, but there is “a higher barrier to entry into retail because the vacancy rates are so low, but certainly yes, we are seeing the trend if… your business is thriving and growing and you need more space, well, you know, it’s not so much subject to interest rates. You have a need, you need to put your people and your products and your delivery trucks and everything else somewhere.
The Doral market is expected to continue to grow and maintain its strong demand.
“South Florida is definitely in a different situation than other parts of the country because there is a lot of demand here,” Mr. Villanueva said. “We are seeing a shift in demographic composition. This is impacting commercial real estate, not just in Doral but everywhere here in South Florida. And we’re fortunate to be in a market where not only is the population growing, we’ve had negative population growth, but overall, if you compare it to a few years ago, we’re still in get ahead of the game.”
