Need to rent an Industrial warehouse in Miami ASAP but think prices of rent are about to go down? What do y'all think, are they going down?
Like title says, need to rent a new warehouse in Miami ASAP. Prices got sky high this year and at current rates my business model barely works, it would be tight. I've been hoping that rates would fall and I'd be under less pressure with a more manageable fixed expense. Prices have plateaued and I'm seeing warehouses for rent stay on the market for months. Yesterday I saw a warehouse that was at a rate of a year ago (unfortunately not a fit for our use). Inventory is still low and I only have one option at the moment. Price is okay but I have a feeling prices will be even better in 2 to 3 months.  What are your thoughts? Do you see industrial rentals in Miami falling? I don't think my current landlord will let me stay for longer,  and I don't want to lose out on this prospective warehouse if rates are not actually going to fall but I don't want to get stuck at a high rate if things are going to fall next quarter.
[{"id": "izzgw3k", "text": "Following", "replies": [], "depth": 1}, {"id": "izzk38k", "text": "Prices won\u2019t be better in 2-3 months.  Maybe 7-10 months, but not 2-3.  Market doesn\u2019t reverse that fast and you just said it\u2026. Inventory is still low.", "replies": [{"id": "izzkgif", "text": "Agreeing with this guy. It's going to take a long time for vacancy to build up enough for LL's to start going backwards on rates.", "replies": [], "depth": 2}], "depth": 1}, {"id": "izzkf6e", "text": "You can always ask the listing broker if owner will accept a lower rate. If you have your own broker they could probably tell you if the asking rates are actually in line with market rates.", "replies": [{"id": "j003d0o", "text": "This. Submit an LOI that mirrors the rate you'd prefer to pay and negotiate to the middle or pat yourself on the back if they accept. It's ALL negotiable.", "replies": [{"id": "j0882x5", "text": "Yes we ended up asking for a lower rate! After some push back we got a $2 sq ft discount!", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "izzkh6h", "text": "Following to see what happens", "replies": [], "depth": 1}, {"id": "izznm9q", "text": "F", "replies": [], "depth": 1}, {"id": "izznvae", "text": "ASAP and lower rates don\u2019t typically go together.", "replies": [], "depth": 1}, {"id": "izzof0h", "text": "It is impossible to time the market. Make the best decision you can at this time for your business and move on. If you think rates will be better in a year then try to get a one year lease, just know that you may have to move in a year or rates could go up.", "replies": [], "depth": 1}, {"id": "izzw8i4", "text": "If you need the space ASAP, then go for the shortest lease term possible.  If you're getting a small-ish space of under 10k/sq/ft then you should be able to get as short as a 2 year lease.\n\nIf your business barely makes money now, I think you'd be best to stay where you are.  People grossly under estimate the cost of moving a business. \n\nDon't move to a larger space unless NOT moving is costing you money.  Too many people fall into the trap of \"I'll make more money if I have a bigger warehouse\".  If you can't make it work now, you can't make it work with more space either.", "replies": [{"id": "j088cmk", "text": "Wish we didn't have to move, the moving costs our brutal for us. It was forced on us by current LL. We just signed a lease and got $2 sq ft off so think thats the best we could do.", "replies": [], "depth": 2}], "depth": 1}, {"id": "izzygu2", "text": "Don\u2019t count on it going down in the next several months if at all, especially in Miami", "replies": [], "depth": 1}, {"id": "j005r01", "text": "Where in Miami and what are your reqs?  Have a couple buildings in Ft. Lauderdale/N. Miami area. Small bay capital of the US", "replies": [], "depth": 1}, {"id": "j00aync", "text": "Working on a deal now in the Miami-Dade area and unfortunately for a user vacancy is still nearly sub 3% so definitely some ways to go before price relief is on the way. On another note commercial rents don\u2019t tend to do u-turns. For example by in large office rents haven\u2019t really fallen, just concessions grew. Things imo would have to get really bad for a prolonged time before that is a reality in the industrial market. Good luck!", "replies": [], "depth": 1}, {"id": "j00hxis", "text": "The biggest issue for landlords in Florida is insurance. Rates are skyrocketing.  It\u2019s eating in to margin a bit. Cam will be going up everywhere.  This will lower base rates a bit but will be offset by increase in Cam. \nYour question doesn\u2019t tell us what size space.  Under 10k square feet is super tight.  Under 5,000sf is almost impossible to find.   It is way to expensive to build this product type.  Small bay industrial construction costs don\u2019t make sense so no one is building.   Rates are going to continue to rise in my opinion in south Florida for spaces under 10k square feet.", "replies": [], "depth": 1}, {"id": "j018a2o", "text": "\" I have a feeling prices will be even better in 2 to 3 months.\"\n\nI thought the same when covid lockdowns hit and then continually for about 2 years but it never happened.", "replies": [], "depth": 1}, {"id": "j01rcii", "text": "Don\u2019t say y\u2019all. It sounds dumb.\n\nSomeone find LL to add $1/sqft.", "replies": [{"id": "j01z726", "text": "Ok boomer", "replies": [], "depth": 2}], "depth": 1}, {"id": "j01wzhp", "text": "The only way rents are going to fall in a place like Miami is if people stop buying stuff online for a long time, and even then you'll probably just get some free months. Lower effective rent for the term but higher strike rent.\n\n&amp;#x200B;\n\nRetail and ecom sales keep going up but industrial supply in Miami-Dade is not keeping up. Hard to build warehouses on the ocean or in the swamp.", "replies": [], "depth": 1}, {"id": "j022vm2", "text": "Miami is a super hot market and there is not much supply of industrial. It is not going down anytime soon.", "replies": [], "depth": 1}, {"id": "j023xuf", "text": "How much product we moving?", "replies": [], "depth": 1}, {"id": "j027sxq", "text": "I don\u2019t see rates coming down anytime soon. Sales seem to have cooled but Leasing is still on fire in SFL and not much inventory like you mentioned. \n\nWhere are you looking? There are still some markets in the $13-15psf range like airport east. 3rd generation, and some deferred maintenance but definitely a cheaper alternative than the Doral, Kendall, even Medley markets. What type of business?", "replies": [], "depth": 1}, {"id": "j02a452", "text": "What\u2019s the rate in Miami  for per sf for 10k or less sq ft?\nAny idea in DFW metro area in Texas ?", "replies": [], "depth": 1}, {"id": "j02ortl", "text": "In my opinion, industrial leasing rates are not going down in any major market over the next year or two. There continues to be a strong demand for US industrial properties due to a variety of factors.", "replies": [], "depth": 1}, {"id": "j03fdoo", "text": "Are you trying to time the market for market rent\u2026imposible. \nIf your business model barely works, then you have to adjust - change your model and not trying to time or time change the market. \nLook at your expenses, income, size and location otherwise you will be out of business shortly after.", "replies": [], "depth": 1}, {"id": "j03imcg", "text": "I used to work in the energy industry which was subject to capital investment expansions and contractions.  They tended to \"average-in\" their capacity investments (meaning they spread their investments into smaller chunks over longer periods of time) to avoid timing issues and to ensure that they weren't demanding liquidity.\n\nIf you say \"ASAP\" that means you're demanding a transaction (i.e., liquidity) and you're not going to get a great price.", "replies": [], "depth": 1}]