Vacancy, absorption, cap rates — a handful of numbers tell you which way an industrial market is moving. Here's how to read them.
Every market report leans on the same short list of statistics. Learn these and the rest is commentary.
The number that connects a building's income to its price.
The capitalization rate is simply net operating income divided by price. A building producing $100,000 of NOI priced at a 6% cap costs about $1.67 million. Flip it around: buyers use the cap rate they'll accept to turn income into a bid.
Lower cap rate = more expensive per dollar of income. Cap rates compress (fall) when interest rates drop, when leases are long and tenants strong, or when buyers expect rent growth — and expand (rise) on the reverse. The same $100,000 of NOI is worth $2 million at a 5% cap and $1.43 million at 7%, which is why small cap-rate moves make headlines.
Net operating income is the property's revenue minus operating expenses — taxes, insurance, maintenance, management — but before mortgage payments and income taxes. It's the standardized "what does this building earn" number that cap rates, appraisals, and loan underwriting are all built on.
Quarterly market reports bury the signal in the tables. Five checks pull it out.
If new supply is outrunning demand, vacancy rises no matter how good the headline sounds — and vice versa.
Small-bay and big-box are different markets that often move in opposite directions. A "soft market" headline driven by empty 500,000-foot boxes says nothing about 5,000-foot suites.
A widening gap means concessions are doing the discounting that asking rents won't admit to.
Companies quietly shedding space they're still paying for is the earliest honest demand signal — it grows before vacancy does.
Nominal rent growth below inflation is real-terms decline. The dollar figure grows; the market doesn't.
National industrial headlines are written about big-box distribution. South Florida's small-bay market runs on different physics: developable land is nearly gone, and what remains pencils better as large projects — so almost no new small-bay product gets built even when demand surges. Meanwhile the tenant base (contractors, services, distributors, makers) keeps growing with the population, and owner-users compete with investors for the same scarce buildings.
The result is a market where small-suite vacancy stays tight even in quarters when the big-box segment softens, and where well-located older buildings hold value beyond what their specs alone would justify. It's the segment we live in — and why reading the size-segment split matters more here than almost anywhere.
Depends which chair you sit in. As a tenant, rising vacancy is leverage — more options, better concessions. As an owner, it's pressure. Either way, the trend matters more than the level.
One hundredth of a percent. A cap rate moving from 6.00% to 6.25% moved 25 basis points — and knocked roughly 4% off the value of the same income stream.
Because operating costs vary so much building to building that quoting base rent plus pass-throughs is the only honest comparison. See our lease-types guide for the full breakdown.
We track availability, rents, and sales across South Florida industrial daily. Ask us what your size range is actually doing right now.