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If current projections hold, nearly 77 million square feet of new industrial space will need to be developed in Florida by 2030 to keep pace with a growing population base and consumer demand, according to a new report.
That future demand comes despite construction of more than 36 million square feet of new distribution space in the Sunshine State since 2006, commercial real estate brokerage firm Cushman & Wakefield says in its 2016 Florida Logistics Report.
At the same time, vacancy rates statewide and in Hillsborough and Pinellas counties and the Lakeland submarket have fallen to 5.2% — a 4.5 percentage point drop since 2010, Cushman & Wakefield notes.
Roughly 2 million square feet of new industrial and distribution space is under construction in Tampa, St. Petersburg and Lakeland, out of 10 million square feet total statewide.
Vacancy rates are slated to fall below the level of last decade's recession sometime in 2017, the report says. In Lakeland, vacancy stands at 4.8%, approaching the historic low of 4.4% that was experienced in 2009.
Even so, rental rates for industrial space remain below pre-recession levels, at an average of $5.99 per square foot on a triple net basis, despite a steady uptick since 2011.
Population growth is largely pushing the demand, for Florida's population has swelled by 1.8% year over year, or by roughly 1,000 people a day — the same rate as before the economic recession that began in 2008.
That surge in population and development could have profound implications for Lakeland and Tampa-St. Petersburg, where consumers spent $8.5 billion and $53.6 billion in retail purchases in 2015, Cushman & Wakefield calculates.
Most of the new industrial development in the Interstate 4 corridor, especially, is occurring for e-commerce purveyors such as Amazon, Wal-Mart and companies that need to reach a wide swath of population in as short a period of time as possible.
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