South Florida Industrial: Strong Growth Amid Challenges
South Florida is a major hub for logistics operations thanks to its proximity to busy ports. In 2020, PortMiami loaded about 1.1 million TEUs (20-foot equivalent units, 20-foot-long cargo containers). That represented a total of 9.7 million tons of cargo. Port Everglades in Fort Lauderdale handled about 945,000 TEUs in 2020 – about 5.7 million tons of cargo. According to the Florida Ports Council, the state’s 15 seaports generate nearly 900,000 direct and indirect jobs and contribute $117.6 billion to the state’s economy.
This week, a tour during NAIOP’s CRE.Converge visited three unique distribution projects in the Miami area that are in various stages of completion.
From Lumber Yard to Industrial Park
Miami 27 Business Park is in Medley, Florida, on the site of a former lumberyard. Located less than two miles from the Florida Turnpike and with good access to Miami International Airport, it consists of 723,208 square feet of new industrial warehouse space, with build-to-suit opportunities.
Duke acquired the lumberyard in 2017 after engaging Colliers to identify properties that would be suitable for industrial development in a market where land is tight. According to Steve Wasserman, an executive managing director in Colliers’ South Florida Industrial Services Group, the 35-acre site for the Miami 27 Business Park, which Duke purchased for $1 million an acre four years ago, is now worth $2 million an acre.
“Historically, Miami had not been a market where big buildings were something that were run of the mill,” said Stephanie Rodriguez, Duke’s regional senior vice president for the state of Florida. “Any user who wants more than 250,000 square feet under one roof has one option, and you’re in it. It was a good timing thing and a testament to our construction team.”
The Miami 27 project faced many challenges. One of the biggest was heavy pollution with toxins such as arsenic. The lumberyard that was in operation at the site had treated wood for decades.
“Dealing with a brownfields site is like an unfortunate Pandora’s box,” said Johnathan Taylor, a project manager at Duke Realty who oversaw the Miami 27 project. “Once you start digging, you don’t know what you’re going to find.”
According to Taylor, Duke dug up tires, automobile parts and even engines that were buried throughout the site.
One of the most important successes of the cleanup efforts was finding a cost-effective way to remediate arsenic-tainted soil on the site. Taylor said Duke’s solution involved mixing the contaminated soil with clean soil at a 3-1 ratio and burying it in three areas across the site. Otherwise, Taylor said Duke would have faced “astronomical” costs to transport the polluted dirt to a landfill.
Approvals were also challenging. Duke had to deal with Dade County as well as the town of Medley, a situation that Rodriguez said is not uncommon.
“When you buy a site in South Florida, you may be sitting on that site, non-monetizing that asset, for two years,” she said. “It’s a 12- to 18-month process to get your entitlements, site plan approvals and your permits before you can even start anything. It takes patience in this market for sure.”
One recently finished building on the Miami 27 site is a 501,224-square-foot warehouse with a cross dock, 36-foot clear heights, 54-foot-by-50-foot interior column spacing, 60-foot speed bays, rail access and four 16-foot-by-16-foot oversized drive-in doors with ramps. Other features include LED lighting, an ESFR fire protection system and hurricane-impact glass in the windows.
Another building is a 221,984-square-foot industrial facility that is leased. It also features 36-foot clear heights and two oversized drive-in doors with ramps.
A Cold Storage Boom
The Lineage Logistics facility in Hialeah, Florida, is a 185,731-square-foot cold storage warehouse with 34,000 pallet positions. It specializes in food processing, packaging, storage and shipping. It offers both U.S. Department of Agriculture Inspection Services and the U.S. Food and Drug Administration’s Inspection Services onsite. It also provides access to Lineage’s global network of cold storage facilities.
“It is a very unique design,” said Brent Stuart, general manager of the facility. “We have very narrow aisles, and because of that, we have about 10 million cubic feet of storage in there. We’re able to use over half of it in active storage locations. That makes us very dense. Now, it’s very expensive to run a facility like this, but it makes us very small and concise.”
Stuart said the building costs about $34,000 a month to power.
Directly across the street from the Lineage Logistics facility, a new cold storage building is under construction. Bridge Industrial’s 312,103-square-foot warehouse in Hialeah, which is expected to open in 2022, will be South Florida’s first speculative cold building. It’s being built on the site of a former landfill. The facility will provide immediate access to Florida’s Turnpike, Interstate 75 and the Palmetto Expressway. It is also a short drive from Port Everglades, PortMiami, Miami International Airport and Fort Lauderdale International Airport.
According to Bridge Industrial, the building’s flexible design will be able to serve a wide range of customers. Each cold room at the facility can reach temperatures ranging from -10° to 55° Fahrenheit thanks to the industrial split freon refrigeration system that will be in use.
Jeremy Jelonek, a development manager with Bridge Industrial, said the facility can be divided into four tenant spaces, and each unit can have its own temperature profile.
The Bridge Point Cold Logistics Center will feature a front-load design with 50-foot clear heights. It will have39 dock-high doors and three grade-level truck ramps. According to Bridge Industrial, the building’s 50-foot clear height can handle around 48,000 pallet positions. It also has a Quell fire-suppression system.
Featured image from Lineage.
This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s CRE.Converge 2021. Learn more about JLL at www.us.jll.com or www.jll.ca.
Trey Barrineau is the Managing Editor, Publications for NAIOP. In this role, he supervises day-to-day operations of Development magazine.
There still economic growth on different sectors. There are some business that became indemand due to the pandemic. Thank you for sharing this information.