A RAPIDLY RISING AVAILABILITY RATE
Since 2021, the industrial and flex space market in Miramar has undergone a dramatic transformation, moving from one of the tightest market conditions in history, to now having an availability rate that is the highest in a decade. Back in 2021-2022, of the 18 million square feet of industrial and flex space in the market, only 520,000 square feet were available, creating a record low availability rate of 3%. This tight market, driven by surging supply chain and e-commerce demand, allowed landlords to raise rental rates significantly, and demand longer length of lease terms from tenants. If a prospective tenant balked at the price, there was always someone else ready to sign a lease for the space.
Now four years later, the availability of industrial and flex space has quadrupled. Currently, 2.1 million square feet of space are on the market—a clear indicator of loosening conditions. Of that, there is 540,000 square feet of sublease space available—more than ever in history—due to the fact that many Miramar companies are downsizing their footprints. This surge in supply reflects a major market correction, though most landlords are still holding firm on pre-pandemic asking rental rates. Landlord listing brokers, acting as landlords’ proxies, are still backstopping landlords’ positions hoping that tenants don’t realize what’s really happening.
SIGNIFICANT OPPORTUNITY FOR TENANTS
The boosterism from landlord listing brokers masks the reality of increased availability, as no landlord broker wants to spotlight the growing number of options tenants now have. However, tenants inking leases today are finding a more favorable environment, inclusive of lower rents, higher concessions and more flexibility as it relates to length of term. These concessions include extended periods of free rent and robust tenant improvement (TI) packages.
This shift marks a significant opportunity for tenants seeking space in Miramar’s industrial and flex market. The combination of higher availability, competitive rents and attractive concession packages presents a chance to secure advantageous lease terms not seen since the pandemic.
Marketing statistics provided by CoStar.
