Florida’s commercial real estate market has attracted investors interested in repurposing vacancies into industrial properties. Abandoned office buildings, for example, have found buyers eager to convert them into warehouses, labs and storage.
Digital shopping launched a demand for more facilities that can support logistics and order fulfillment for big-box retailers. As reported by CNBC, completed real estate transactions during 2020 included nearly 350 million square feet intended for warehouse and distribution centers.
Profitability for industrial use has increased
Industrial property rental rates across the U.S. increased by 5.1% between February 2020 and 2021. The average rental price in February 2021 reached $6.47 per square foot, and renters signing new leases paid a premium of nearly 15%.
The demand for properties with industrial potential also includes golf courses and shopping malls that have experienced customer reductions. Whether a company sells groceries, clothing or furniture, its goods benefit from storage in a location close to transportation hubs.
Vacant commercial properties may require a land-use variance
Investors searching for vacant office buildings near an airport, for instance, may require permission to rezone the property. Developers may submit applications to the local zoning board to obtain the required variance. The application may, however, need to provide ample justification for the proposed changes.
Broward County, for example, requires proof that converting a former office building to an industrial property will not cause harm to the public or environment. Applicants may submit surveys, tests and models to justify their repurposing plans.
As consumers’ shopping habits change, Florida’s real estate may continue to adjust to accommodate their demands. The market’s evolving needs may demonstrate increased profitability as unused commercial spaces convert to industrial properties. The conversion process, however, may require a variance application that passes a zoning board’s review.
