Is South Florida The Newest Hot Spot For Manufacturing?

Written by on 07.26.16 in Industrial, Investment Trends, Retail - No comments

South Florida’s industrial developers are building bigger and better facilities to accommodate a thriving logistics market, a new wave of e-commerce giants looking for large chunks of warehouse space  and an uptick of goods flowing through the now-expanded Panama Canal.

 John Boyd Jr., principal of the Boyd Co. Inc.

John Boyd Jr., principal of the Boyd Co. Inc.

That is according to John Boyd Jr., principal of the Boyd Co. Inc., out of New Jersey. In a recent article from GlobeSt.com sister publication, ALM’s Daily Business Review, Boyd Jr. says developers should shift their focus to another type of tenant. Boyd specializes in advising corporations, including food and beverage manufacturers, on site selection. He flew to Miami recently week to meet with two clients in the food processing industry toying with the idea of relocation.

“Food processing is one of the more mobile and exciting sectors of advanced manufacturing today,” Boyd said.

He explains why: Five years ago, the $2 trillion North American industry was hit with sweeping reform when the Food Safety Modernization Act was signed into law, which sent compliance costs soaring.

According to the article, as companies come to grip with the new regulations, they’re faced with either spending tens of millions of dollars to upgrade aged facilities or relocating to new plants in less expensive markets.

Suddenly Miami-Dade and Broward counties have hit the map. Manufacturing has never been named as one of the Miami region’s core industries, but could it be?

Below is the full Daily Business Review article about Boyd Co.’s most recent site selection study.

South Florida‘s industrial developers are building bigger and better facilities to accommodate a thriving logistics market, a new wave of e-commerce giants looking for large chunks of warehouse space and an uptick of goods flowing through the now-expanded Panama Canal.

John Boyd Jr., principal of The Boyd Co. Inc. in New Jersey, says developers should shift their focus to another type of tenant. Boyd specializes in advising corporations, including food and beverage manufacturers, on site selection. He flew to Miami this week to meet with two clients in the food processing industry toying with the idea of relocation.

“Food processing is one of the more mobile and exciting sectors of advanced manufacturing today,” Boyd said..

He explains why: Five years ago, the $2 trillion North American industry was hit with sweeping reform when the Food Safety Modernization Act was signed into law, which sent compliance costs soaring.

As companies come to grip with the new regulations, they’re faced with either spending tens of millions of dollars to upgrade aged facilities or relocating to new plants in less expensive markets. Suddenly Miami-Dade and Broward counties have hit the map. Manufacturing has never been named as one of the Miami region’s core industries, but could it be?

Boyd Co.‘s most recent site selection study shows South Florida is among the lowest cost locations for food and beverage processors. Annual operating costs in the Miami region for a 300,000-square-foot facility with 500 hourly workers came out to $37 million — the fourth lowest among the top 24 food processing centers in North America. The lowest was Canada‘s eastern Ontario region, at $30.3 million, and the highest was San Francisco, where costs were over $45 million.

South Florida is already home to a few well-known brands, like Goya Foods Inc. and Kraft Foods Group Inc.

“You will be seeing projects of that size look at the region,” Boyd said. “The Food Safety and Modernization Act is kind of an under-the-radar-screen catalyst for millions of dollars of industrial development projects.”

Commercial real estate firm JLL hints at the region’s ability to tap into the massive industry in its second quarter report, where it states “food and beverage companies are looking to relocate to high-quality existing space with proximity to major transportation hubs.”

Jose Juncadella, a principal and co-founder of Fairchild Partners, is now leasing two of the largest facilities under construction in Miami-Dade County. At 300,000 square feet, the Hialeah properties are being built on spec for large users in the logistics or e-commerce fields, he said.

“We haven’t seen any [food and beverage] company of that size, such as Goya, in the market looking for that amount of square footage,” Juncadella said. “We are a big population market … so I could see where we could attract the food industry.”

In addition to South Florida‘s attractive operating costs, the region’s expanding seaports and proximity to Latin America are also catching industry eyes. Another plus is the workforce training available through Miami Dade College, which now offers an associate degree in advanced manufacturing.

“There’s a common denominator in these markets that attract companies and it’s having a program like Miami-Dade College’s.” Boyd said.

 

Source: GlobeSt.

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