Demand for Doral commercial real estate slides, but prices keep rising
Lee & Associates South Florida Senior Vice President, Conner Milford Discusses Doral Market with Miami Today
'Demand for commercial real estate slides, but prices keep rising'
Doral’s commercial real estate scene continues to see rising prices despite the pullback in demand.
“I think the year started out pretty hot in comparison to the past ... 18 months,” said Conner Milford, senior vice president with Lee & Associates. “However, it’s definitely slowed down a bit here more recently.”
Mr. Milford said a possible reason for this slowdown could be the uncertainty surrounding tariffs impacting goods coming in and out of the country.
“We've certainly seen kind of a pullback from tenant demands,” he said, “and even so far as to have users, sort of business owners, tell us that they’re kind of holding off for, I guess, the term.”
People, he said, are waiting to see how the conversation focused on tariffs develops before they decide to move forward on acquiring more space.
Despite the slowdown in demand, said Mr. Milford, prices are increasing, but not at the same speed as in the past.
“I think what you’re seeing now is a continuation of what was happening last year,” he said, “which is landlords giving more concessions during leasing negotiations, so they’re keeping their rents where they’re asking, or at least somewhere near they’re asking. Instead, they’re giving some concessions, such as tenant improvement dollars or three months of rent at the beginning to entice tenants to come to their building.”
Due to the constrained supply of buildable land in Miami, said Mr. Milford, prices continue to increase despite the softening in demand.
“You have the Everglades,” he said, “you have the ocean, so there’s really nowhere else to go and build. Unlike a lot of markets in the US that have overbuilt, it’s very hard to overbuild in South Florida because of the lack of buildable land that’s available.”
However, Carlos Villanueva, district sales manager for the Coral Gables and Coconut Grove office at the Keyes Company, noted Doral’s commercial real estate has remained strong in the sectors of retail and industrial.
“Where we’ve seen demand weaken is in office space, which is true in most places,” he said, “but overall, the demand for the Doral area because of its location, because of its density, highway access, all of it actually makes it very attractive for commercial real estate.”
Industrial space continues to be in strong demand, both when it comes to leasing and selling, he said, and is most likely the market leader in the Doral, followed by retail.
“In the office sector, for Doral, we’re seeing an increased vacancy rate,” said Mr. Villanueva. “Industrial is around 5% where in office is 9%, so we’re seeing that the market’s definitely still moving in the office sector, but it slowed down a little bit.”
The median asking price in retail in Doral is $48.22 per foot, he said, on the industrial side it is $20.88 and office is $52.
Doral is a resilient market because it is geographically in the center of the county and very close to the cargo aspect of the airport and the car component of the airport, said Mr. Villanueva, as well as the Port of Miami.
“The transportation arteries,” he said, “continue to make it very attractive.”
