Prime location drives Doral commercial realty boom
Miami Today Discusses Doral Market with Lee & Associates South Florida Senior Vice President, Conner Milford
'Prime location drives Doral commercial realty boom'
Doral’s prime location continues to drive the city’s high demand for commercial real estate.
“The demand in Doral has been steady for years,” said Lee & Associates Senior Vice President Conner Milford. “I haven’t seen any sort of real drop...”
Doral is a premier location due to its proximity to PortMiami and Miami International Airport, Mr. Milford said. “I would say the majority of Class A products that’s being delivered in the market is either in Doral or just north of there.”
Doral is probably the most in-demand market in South Florida, he said.
Similarly, other professionals in the field have noticed the city’s growth being closely related to its centralized location.
“When it comes to the Doral’s commercial market, it has certainly experienced significant growth and development over the past several years,” Carlos Villanueva, district sales manager for the Coral Gables and Coconut Grove office at the Keyes Company. “The main driver for that has been the access to highways to Miami International Airport, as well as access to Port of Miami. It’s really an ideal hub when it comes to business.”
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Pricing in the city has also impacted the commercial real estate scene.
“We’ve seen pricing pretty much remain the same for maybe about 12 months,” said Mr. Milford. “I think what happened is when interest rates rose, we saw cap rates also rise; and if it weren’t for rising rents, we probably would have seen pricing decline a bit – like some other markets have – but due to the strong rent growth that South Florida has, mostly due to constrained supply, we’ve seen prices just kind of remain steady.”
“So even though cap rates are rising, we’re still seeing kind of the same level of pricing due to the rent growth that we continue to see,” he said, “although that’s also slowed down a bit, but we’re still seeing some positive rent growth.”
On the industrial side, said Mr. Villanueva, the asking rents are just under $23 a square foot and “rents have actually grown year over year on the asking 6.8% up and we’re seeing vacancy rates under 5%, 4.7% for industrial.”
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Some of the hottest markets in the US are seeing rent growth slow and possibly even some decline, said Mr. Milford. However, “we’re not seeing that, mostly due to the fact that we have the Everglades on one side and ocean on the other side and it’s not a lot of land to continue building, so the supply is constrained.”
Doral’s commercial real estate market is allowing users to join the conversation.
“Investors are not as aggressive right now because they just don’t have that delta between their interest rate and the cap rate that they’re buying in, and what that has done is allow users to have a chance to compete to buy properties that they need,” said Mr. Milford. “I think we’ll see more of that, where users are going to continue throughout this year to have a chance to purchase some of these properties, where in the past they probably would have gotten outbid by investors.”
Mr. Milford says this year, there’s an opportunity for users to come in while interest rates are still high. The high interest has cooled off investors and allowed users who need the property for their own use and “not just to make income for themselves passively, they need to use it to operate their business and they’re finally having a chance to compete for these properties without having so many investors trying to outbid them.”
Users have a need; this has an impact when it comes to deciding on purchasing.
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About Lee & Associates South Florida
Lee & Associates South Florida is a fully vertical commercial real estate brokerage firm focused on industrial, office, retail, multifamily, investment and land sectors. Our dedicated team of professionals is led by Matthew Rotolante, CCIM, SIOR a 4th generation South Florida native in a family that has owned and operated commercial property here since 1928. Lee & Associates is the largest agent owned brokerage in the nation with Senior Agent’s ability to earn profit share resulting in the highest splits while still receiving full resources, support and leads from our national network. Our collaborative and cheerful culture allows for open communications throughout the company, fostering the sharing of information and best practices to better enable client decision making. The Lee & Associates’ robust national network that sold and leased over $32 Billion in 2022 offers clients a cross-market platform of expertise and deal opportunities across all asset specialties and representation roles. For the latest news from Lee & Associates South Florida, visit leesouthflorida.com or follow us on Facebook, LinkedIn, Twitter and Instagram, our company local news.
About Lee & Associates
Lee & Associates is a commercial real estate brokerage sales, leasing and management firm. Established in 1979, Lee & Associates has grown its service platform to include over 75 offices in the United States and Canada. Lee & Associates is the largest agent owned commercial real estate brokerage where agents get the greatest return for their efforts and hence are more committed and better enabled to provide superior results for their customers. For the latest news from Lee & Associates, visit lee-associates.com or follow us on Facebook, LinkedIn, Twitter and Link, our company blog.
