Commercial Real Estate Is Fueling Growth and Development in Doral
The real estate market in the greater Miami area has been booming for well over a decade, due to a variety of factors, including wealth migration, consistently good weather, an attractive lifestyle, a relative shortage of inventory, and the ongoing migration of homebuyers from regional population centers such as New York and New Jersey. The result has been consistent, significant growth of the market as a whole, including a near tripling of the median home price. Within the Miami region, specific neighborhoods and areas have seen even more explosive growth, including Palm Beach, Miami Beach, and Doral.
Doral, in particular, has seen sustained growth in the commercial real estate sector that has outpaced virtually all other markets in the region. Many real estate professionals assert that Doral is the hottest commercial real estate market in South Florida, with vacancy rates extremely low and the rental price per square foot ranging from $23 for industrial real estate to $41 for office space and more than $45 for retail space. And while many of the other leading commercial real estate markets throughout the US are seeing rent growth slow (and even decline in some instances), that is not the case in Doral, where limited inventory and development due to the city’s location between the Everglades and the coast of the Atlantic Ocean has led to a sustained demand for rental spaces.
Doral Sees Continued Growth of the Commercial Real Estate Sector
The sustainability of the Doral commercial real estate market is largely driven by proximity, as Doral is strategically located between PortMiami and Miami International Airport, with convenient highway access to both. This centralized location makes Doral a hub of business and enterprise—a development that has been encouraged and facilitated by city leaders. Industries such as logistics, finance, entertainment, health care, and tech all have a large presence in the area, which ensures continued investment and development.
The influx of wealthy homeowners in Doral—often as a result of industry growth and job creation—has led to a booming retail market, as well, as consumer spending has been consistently on the rise. This has resulted in the development of numerous shopping centers and mixed-use developments, with a wide variety of retail outlets and relatively sustained growth due to various waves of affluent migrants from Mexico and countries throughout South and Central America. Domestic migration from East and West Coast states has also helped drive this ongoing growth. Add to that the fact that large numbers of people commute into Doral each day for work—plus the tourism sector capitalizing on access to the beach and Everglades—and retail vacancy has stayed low at around 3 percent.
Although industrial rent prices per square foot are not as high as retail prices, warehouse spaces tend to be large and remain occupied in the area, largely due to the city’s central location and proximity to transportation. Both Doral and nearby Medley have seen continued demand for storage and distribution facilities, largely driven by e-commerce and related factors such as last-mile delivery and refrigerated/freezing warehousing needs. Amazon has a warehouse nearby, focused on last-mile delivery, while numerous food producers and centralized commissaries rely on temperature-regulated warehousing in the area.
Office rental spaces are another major driver in the local commercial real estate scene. After the COVID-19 pandemic led to an increasing number of people working from home, multiple office properties were demolished in favor of other developments. Now that the workforce has largely returned to the office, demand for the remaining office space is keeping prices high and fueling further growth.
Residential Real Estate Plays a Role
At the same time, as people continue to move into Doral, the need for residential properties is growing, which puts further pressure on developers to demolish or repurpose office properties. This trend is expected to keep the supply side low and the demand side high in terms of office space rentals, boding well for property owners and others who benefit from high rental prices.
Finally, Doral has developed a reputation for providing a good quality of life and access to various work and entertainment opportunities. This, in combination with ongoing migration trends, suggests that the population will continue to grow, putting further pressure on the residential real estate sector. At the same time, further investment in restaurants, retail, and lifestyle amenities are expected to continue, adding fuel to the rapid growth that we have seen in Doral over the past decade.
Looking to the Future
While there is always the possibility that some unforeseen external factor, such as another pandemic or global catastrophe, could change the dynamic in Doral, most experts expect the current growth trend to continue. A changing demographic mix driven by continued commercial growth and wealth migration means greater demand for upper-class amenities and properties, which will only serve to further raise prices in an area with a limited supply of land available for development. For those who are already established in the area or able to invest in the near future, the long-term return on investment potential appears to be outpacing most areas around the US, making Doral a great place to develop. As its reputation continues to grow, the market will only become more valuable, making it likely that Doral will remain a leader in the south Florida real estate sector for years to come.
