LBA Realty paid $198 million for Dolphin Commerce Center, according to Miami-Dade County property records.
The price represents a big gain over the $45 million Principal Real Estate Investors paid for the five buildings totaling 709,000 square feet in 2004.
The buildings are fully leased in a Miami market with a tight 2.1% vacancy, according to CoStar data. National industrial vacancy is at 4%. LBA Realty, which owns a logistics company, has properties around the country. The latest deal gives it four in South Florida.
Higher interest rates have caused some consternation among buyers since mid-2022. U.S. industrial property sales are on track to reach their second-highest annual total of all time after the record in 2021 of $125 billion, though buyers and sellers pulled back some in recent months amid worries about rising interest rates and a slowing economy.
Still, sales have held up remarkably well despite interest rates doubling on new industrial loans. “This is a testament to the fact that there remain far more buyers looking to build exposure to the sector than there are highly motivated sellers,” according to CoStar’s industrial capital markets report.
One way around the higher interest rates is assuming an existing loan, which was the case in LBA Realty's Miami deal, property records show.
Miami’s industrial market has performed much differently than the nation as a whole. Industrial sales have hit $1.52 billion in sales during the final three months of 2022, surpassing the previous record set in the third quarter with $1.35 billion, and will set a record for the whole year.
CoStar News writer Randy Drummer contributed to this report.
