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Commercial Real Estate Solutions for E-Commerce Players

Posted by Keith Darby on July 24, 2020

The Covid-19 crisis has bolstered and expedited the trend of consumers buying anything and everything from groceries, furniture, to pet toys with a click of a button from the phone or computer versus venturing out to the traditional brick and mortar retail establishments. E-commerce is the driver of the Florida commercial industrial real estate market and is continuing to offset the losses from more traditional international trade flow. The rise of ecommerce has made industrial real estate the “darling” of Miami’s commercial real estate industry with second quarter industrial vacancies in Miami-Dade being less than 5.5% and average rents at $12.60 per square foot. Meanwhile fewer new lease deals in the peer sectors of office, retail and hospitality where South Florida commercial real estate vacancies increased since this quarantine began. Source: CoStar Miami – FL-Industrial-Market-2nd-Quarter-2020

E-commerce players have similar industrial needs as your traditional distribution traders. Location is of utmost importance as e-commerce tenants need convenient, easy access to post offices and other shipping vendors. Ceiling height is also an important factor in choosing the right industrial property. Florida Commercial Real Estate brokers at RISE Realty suggest a minimum 20’ clear ceiling height to allow for a minimum of three rows of pallet racking (approximately 6’ each row) and 18” of clearance for fire safety and ESFR sprinklers. Truck courts are also a very important factor for e-commerce players when considering industrial properties. Dock height doors make loading and unloading products most efficient, but your friendly Florida Commercial Real Estate Agents at RISE Realty suggest a minimum 100’ truck court to avoid delays or obstacles in loading and unloading. Optimal column spacing is a big factor for older manufacturing facilities in South Florida with lower ceiling heights, which is why South Florida commercial real estate broker Keith Darby, CCIM suggests minimum 40’ X 40’ column spacing which will aid in optimal pallet racking.

Given the shortage of good land for industrial development in the Florida real estate market near the Miami Airport it will be interesting to see if Landlords will convert dead malls and empty bix box retail to e-commerce fulfillment centers or logistic hubs. Municipalities will have to work with ownerships on the hurdles of converting old retail space to alternative uses. For instance, zoning laws that conform to adjacent residential areas must be reviewed and approved.

If you are a boutique shopkeeper struggling through quarantine, RISE can empathize and suggest alternatives to sustain your business. Partner up, plus create web content, build drop-ship relationships and wholesale strategies that diversify your sales channels. We’ve all witnessed 2 decades of macro economic trends that blend traditional brick-and-mortar retail with modern webstore distribution channels. In fact, one of our retail / industrial real estate agents Kevin Krueger pioneered “the dot com’ing” of merchandise back in 2004 just a few years after web stores began. Kevin’s initial strategy was focused on web and wholesale but to achieve critical mass his merchandise sales began vending at popular events [not available during quarantine]. One sales channel fed another’s marketing and inventory turns. His business set-up a warehouse adjacent to their manufacturing contractor; avoiding expensive time and shipping costs while tightening a working relationship with that contractor. Ironically, after last decade’s 2008 retail recession when wholesale dropped precipitously but web and event sales still thrived, Krueger moved into a brick and mortar boutique that strengthened his brand, staff and closed outdated inventory to balance cash flows. Small Retailers might be wise to align to create wholetail warehouse co-ops; that is, 2 or more boutiques split rent, fixed and flexible costs while building online stores, drop-shipping from other websites [or vice versa since you’ve got the audience]. If your webstore or brick-and-mortar storefront are struggling now, tap into South Florida’s thriving industrial warehouse real estate, because other like minded tenants and landlords might be happy to help and earn your business.

Mixing retail with industrial use properties will certainly be a trend for savvy investors looking to make commercial real estate investments in Miami for the coming decade.

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