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July 29, 2010 |
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| March 12, 2010 |
By: Mike Seemuth |
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elf-storage space appears overbuilt, but occupancy rates could rise this year if a pause in construction persists.
Commercial real estate brokerage Marcus & Millichap reports that developers last year finished building 838,000 square feet of self-storage space the Miami-Fort Lauderdale metropolitan area, the largest annual addition to the local inventory in the past five years.
But in a new research study, the brokerage firm also reported that “this year, there are no projects scheduled for completion, and construction of some of the developments in the planning pipeline has been deferred” in the two-county area. (The firm did not include Palm Beach County in the study).
Marcus & Millichap said both occupancy rates and monthly rents at local self-storage buildings have fallen in the last year. “As of the close of 2009, occupancy was in the high 70 percent range, down from the low 80 percent range the prior year. Consequently, rents in the marketplace are 6 percent lower than a year ago.”
The brokerage firm calculated that the average monthly rent for a self-storage unit in the Miami-Fort Lauderdale area was about $1.20 per square foot in the fourth quarter of 2009.
Many jobless South Floridians have sold or given away possessions they would have stored if they were employed. Another weight on the self-storage market is the area’s flattened population. This year, the number of Miami-Fort Lauderdale households “is expected to decline, with growth forecast to resume next year,” Marcus & Millichap reported.
But a slower rate of job-market deterioration could improve business conditions for self-storage landlords. Marcus & Millichap expects the number of jobs in Miami-Dade and Broward to dip by 3,000 this year after dropping by 20,000 last year.
Based on space per capita, the local market for self-storage rental units may have greater long-term potential than current business conditions suggest. Marcus & Millichap figures show the amount of self-storage space per person is 6.3 square feet in Miami-Fort Lauderdale, compared to 6.9 square feet statewide and 7.2 square feet nationwide.
Manpower survey suggests steady local employment in the second quarter
A survey of South Florida employers suggests that the total number of jobs in the area will hold steady in the second quarter.
Temporary staffing agency Manpower reported this week that 10 percent of South Florida companies planned to hire workers in the April-June period and 8 percent expected to eliminate positions in the quarter.
Milwaukee-based Manpower also reported that 80 percent of South Florida companies expected no staff level changes in the second quarter, and 2 percent were uncertain.
Employers in Miami-Dade, Broward and Palm Beach counties “are much more optimistic about hiring activity as compared with one year ago,” Manpower spokeswoman Judy Leppla said in a prepared statement. In addition, “hiring levels in our area appear to be stronger compared with the last quarter.”
In the coming quarter, the prospects for South Florida job hunters seem most promising in durable goods manufacturing, professional and business services, leisure and hospitality, and government.
Manpower also reported that local employers in such industries as construction, transportation and utilities, and financial services expect to reduce their payrolls in the April-June period.
The March hiring outlook among South Florida employers in nondurable goods manufacturing, wholesale and retail trade, and education and health services is unchanged from their December outlook.
The new survey from Manpower is one in a series showing gradual improvement in local demand for labor.
In the quarterly survey Manpower released Tuesday, the staffing agency reported South Florida employers would be hiring at a “moderate” rate in the second quarter.
That compares with local hiring outlooks that Manpower described as “limited” in December, “reserved” in September, “unsteady” in June and “very sluggish” in March of last year.
Cost concerns could drive a broader adoption of cloud computing
The adoption of so-called cloud computing, allowing users to treat both software and hardware as online services, may spread rapidly this year.
Many users of server-class computers already have switched from purchasing and installing software to buying subscriptions for online software access.
Now some businesses and public bodies are taking the next step into cloud computing by purchasing Internet access to both software applications and virtual servers. Security is a big concern among mainframe computer users who prefer a more traditional approach to information technology. But many IT providers believe the outlook for cloud computing is bright.
Microsoft, the world’s biggest software company, has made a companywide commitment to develop and improve products for cloud computing. One of its cloud customers is the city government of Miami. The city has begun to use Microsoft’s technological platform for cloud computing to analyze requests for pothole repair, trash pickup and other non-emergency services.
Among South Florida’s biggest providers of cloud computing capability is Fort Lauderdale-based Citrix Systems, a leading developer of business software compatible with Microsoft operating systems. Publicly held Citrix recently introduced an application that provides online access to employee training programs that run on virtual servers.
Miami-based data center operator Terremark Worldwide also has developed a robust market for cloud computing services “both in the federal government and in the commercial space,” said Adam Smith, chief legal officer of publicly held Terremark.
Privately held South Florida companies that sell services related to cloud computing include Host.net in Boca Raton. Started in the 1996 as a two-person operation in a garage, Host.net now has more than 50 employees and “tens of millions of dollars in annual revenue,” according to its Web site.
Cost savings are driving the trend. Many organizations that switched to cloud computing have dramatically lowered their information technology expenses. One is a Terremark client, the federal General Services Administration, which saved about $1.7 million annually by moving the operation of one of its Web sites, www.USA.gov, to a cloud environment.
Like previous technological transformations, however, the development of cloud computing is creating confusion and inspiring opportunism.
“You’ll find that if people can put the word cloud before what they sell, they are going to do it because it’s the hot thing,” Terremark’s Smith said. “There is some confusion out there about what it really is.”
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