South Florida’s economy continues to support industrial demand through its role in trade, logistics, tourism, and financial services. PortMiami, Port Everglades, and Miami International Airport anchor freight movement and regional distribution activity. While job and population growth have moderated, labor conditions remain healthy, and continued household formation supports demand for warehouse and consumer-oriented industrial space. Overall, the region’s diversified economy and global connectivity continue to support steady industrial fundamentals.

 

Key Findings

• South Florida’s industrial market continued to normalize in Q1 2026 as new supply outpaced tenant demand, resulting in negative absorption and higher vacancy across major logistics corridors.
• Despite softer leasing fundamentals, asking rents remained near record highs, supported by limited land availability and continued trade-driven demand.
• Construction activity is tapering, but the existing supply wave will keep vacancy elevated and rent growth under pressure in the near term.

 

South Florida Industrial Supply & Demand Dynamics

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

 

South Florida Demographics

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

• Unemployment Rate: 3.5%
• Current Population: 4,868,820
• Households: 1,765,613
• Median Household Income: $81,861

 

South Florida’s industrial market continued to normalize in Q1 2026 as elevated supply additions outpaced tenant demand across several major logistics corridors. Vacancy increased to 5.8%, while annual net absorption remained negative at 1.1 million square feet, reflecting softer leasing activity among large-format warehouse users. Despite these headwinds, market fundamentals remain healthy by historical standards, with vacancy still below many major U.S. industrial markets. Asking rents increased 1.2% year-over-year to $18.64 per square foot, demonstrating the continued pricing power of well-located industrial assets. Leasing activity remained driven by logistics, distribution, e-commerce, and trade-related occupiers, while smaller-bay industrial properties continued to outperform larger warehouse facilities due to limited availability. As construction activity slows and recently delivered space is absorbed, market conditions are expected to stabilize, supporting steady performance through the balance of 2026.

Top South Florida Tenants

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

• PepsiCo
• Ryder System, Inc
• Owens & Minor
• JELD-WEN

 

Population, Labor Force, & Income Growth

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

 

South Florida Industrial Construction

Development remained active in Q1 2026, though the pace of new construction continued to slow from recent peak levels. Approximately 895,000 square feet of industrial space was under construction across South Florida as developers responded to softer leasing conditions and higher financing costs. Recent deliveries have contributed to rising vacancy, particularly among large-format logistics facilities, where lease-up timelines have lengthened. As a result, developers have become more selective with new starts, focusing on projects near major transportation corridors and population centers. As construction activity moderates and recently delivered space is absorbed, market conditions are expected to stabilize through the remainder of 2026.

 

SF Construction Starts

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

 

SF Under Construction

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

 

South Florida Industrial Sales

Investment activity remained resilient in Q1 2026 despite a higher interest rate environment and softer leasing fundamentals. South Florida recorded approximately $345 million in sales volume during the quarter, with assets trading at an average price of $279 per square foot and a market cap rate of 5.4%. Investor demand remained strongest for well-located industrial properties with access to major transportation infrastructure and population centers. While buyers have become more selective in their underwriting, the region’s long-term growth prospects, limited land availability, and importance as a logistics gateway continue to support capital market activity. As market conditions stabilize, investor interest is expected to remain concentrated on high-quality industrial assets throughout 2026.

 

Sales Volume

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

 

By the Numbers

Source: CoStar Group, Inc. | Miami & Fort Lauderdale

• Sales Volume: $345M
• Price Per SF: $279
• Cap Rate: 5.4%
• Vacancy Rate: 5.8%
• Rent Growth: 1.2%
• Asking Rent Per SF: $18.64
• Under Construction: 895K SF
• Delivered: –
• Absorbed: (1.1M) SF