Miami Industrial Real Estate Faces Modest Correction as Construction Slows

Edward W. Easton, founder and CEO of The Easton Group, provides critical insights into Miami's industrial real estate market in a revealing Q&A. The family-owned commercial real estate firm, with three generations actively involved, manages approximately five million square feet across Miami-Dade County through its vertically integrated platform offering investment, development, brokerage, and property management services. Easton reveals that while demand has cooled from recent peaks, the market remains reasonably stable with deals still closing, though at a slower pace.

The industrial sector is experiencing a significant shift as price disconnects between buyers and sellers impact transaction volume, with many sellers failing to adjust expectations to current market conditions. Easton anticipates a modest 8% rent correction over the next year and notes occupancy rates dipping from 98% to 95%. Most notably, new construction has dramatically slowed due to unfavorable economics—development costs of $350 per square foot against average rents of $15 per square foot yield insufficient returns of about 4.28%, prompting developers to adopt a wait-and-see approach.

The Easton Group is strategically focusing on acquiring existing buildings in core markets like metro Miami, particularly targeting stabilized properties with below-market rents. While some stress exists in CMBS markets, Easton doesn't anticipate widespread distress given current market liquidity and healthy capital markets. This comprehensive analysis from the Q&A with Edward W. Easton, Chairman, The Easton Group originally appeared on citybiz, offering valuable perspective on market dynamics from an industry leader with decades of experience.