South Florida Industrial Market Overview.
Vacancy at 6.9%, asking rents at $16.74 NNN, 4.2M SF under construction. Where the Tri-County market is going, and where we're putting capital.
Vacancy at 6.9%, asking rents at $16.74 NNN, 4.2M SF under construction. Where the Tri-County market is going, and where we're putting capital.
Tri-County vacancy ended Q1 2026 at 6.9%, up 40 basis points from Q4 2025 and 110 basis points from the cycle low of 5.8% set in Q1 2025. On the surface the trajectory looks concerning. Underneath, the increase is almost entirely driven by deliveries of speculative 200k+ SF big-box product hitting the market faster than tenants are leasing it.
Small-bay vacancy — our area of focus, defined as 5,000 to 25,000 SF multi-tenant flex and warehouse — sits at 3.8%, roughly 310 basis points tighter than the headline number. That spread has widened, not compressed, over the past four quarters. The market we operate in is structurally different from the market the headlines describe.
Net absorption for the quarter was +1.8M SF, modestly positive but well below the 3M+ SF quarterly run-rate of 2022. The deceleration is consistent with our underwriting expectations: occupier decisions slowed through 2024 and 2025 as tenants digested earlier expansions, and we expect a return to a steadier absorption pace in the back half of 2026 as inventory burn-off catches up to demand.
The gap between aggregate vacancy and small-bay vacancy. If big-box vacancy keeps rising while small-bay holds, the institutional capital chasing big-box will eventually rotate. We want to be positioned in small-bay when that happens.
Average asking rent across the Tri-County industrial market reached $16.74 NNN in Q1 2026, up from $16.55 in Q4 2025 and $15.85 in Q1 2025 — a year-over-year increase of 5.6%. Rent growth has decelerated meaningfully from the 12%+ pace of 2022, but the asking rent line has not turned negative on any single quarter through the recent vacancy uptick. We read that as durable underlying demand.
The submarket dispersion tells a more interesting story than the headline. Palm Beach posted the strongest rent growth at 7.8% YoY, with Miami-Dade at 5.2% and Broward at 4.1%. The Palm Beach premium reflects both demographic in-migration and the structural land constraint we've discussed in prior research.
| Submarket | Q1 2026 Rent NNN | QoQ Change | YoY Change |
|---|---|---|---|
| Palm Beach | $17.85 | +1.8% | +7.8% |
| Miami-Dade | $17.20 | +1.3% | +5.2% |
| Broward | $16.05 | +0.9% | +4.1% |
| Treasure Coast | $13.40 | +1.5% | +6.4% |
| Tri-County Average | $16.74 | +1.2% | +5.6% |
The average cap rate on stabilized institutional industrial product compressed 20 basis points in Q1 2026 to 6.3%. The compression came primarily from improved buyer demand at the end of the year following the modest rate relief in late 2025. Sales volume in Q1 was up 14% QoQ, with private capital and family-office buyers continuing to take share from institutional funds whose 2021–2022 vintage deals are creating refinance pressure.
The active buyer pool has shifted. Through 2024 the marginal buyer was institutional capital deploying out of new fund vintages. In Q1 2026 it's been private capital — family offices, syndicators with relationship-driven LP bases, and select strategic operators who can underwrite the asset on operating fundamentals rather than waiting for cap compression to bail out a thin coupon.
Senior secured debt on stabilized industrial is currently pricing at 6.40% on 5-year terms, with the most active lenders being regional banks and select life-co providers. The high-leverage debt-fund product that dominated 2021–2022 has largely retreated; we're not seeing many deals close above 70% LTV.
"The cap-rate compression we've seen this quarter isn't a beta trade on rates. It's a flight to defensible assets by the buyers still willing to write checks."
Our submarket scorecard for Q1 2026, ranked by composite score across vacancy, rent growth, absorption, and pipeline pressure:
| Submarket | Vacancy | Rent YoY | Net Absorption | UC % of Inv. | Maco View |
|---|---|---|---|---|---|
| Palm Beach — small-bay corridor | 3.4% | +8.2% | +420k SF | 1.2% | Overweight |
| Treasure Coast | 4.8% | +6.4% | +180k SF | 0.8% | Overweight |
| Broward — Pompano/Deerfield | 5.6% | +4.8% | +390k SF | 2.1% | Selective |
| Miami-Dade — Doral/Hialeah | 6.2% | +5.2% | +580k SF | 3.4% | Selective |
| Miami-Dade — Airport West (big-box) | 9.4% | +3.1% | +210k SF | 5.8% | Underweight |
Our highest-conviction submarket remains the Palm Beach small-bay corridor, where every metric we track is moving in the right direction. The pricing has gotten harder, but the operating returns continue to justify selective deployment at the right basis.
Our base case for the rest of the year:
Overweight Palm Beach and Treasure Coast small-bay. Underweight Miami-Dade big-box. Active diligence on three transactions sourced through forced-seller dynamics. We're underwriting every deal to today's debt environment, not a hoped-for lower-rate refinance world.
Market data is triangulated from multiple institutional sources to mitigate vendor-specific bias. Submarket-level data is supplemented with Maco proprietary tracking of multi-tenant small-bay industrial transactions. Where we estimate or project, the assumption is disclosed.
Disclaimer. This report is for informational purposes only and does not constitute investment advice, a solicitation, or an offer to buy or sell any security or interest. Forward-looking statements are based on Maco Equity Partners' current views and are subject to risks and uncertainties. Past performance is not indicative of future results.
Prepared by Maco Equity Partners Research. Inquiries: rmac@macoequitypartners.com · macoequitypartners.com