Josh Rodstein, NAI Miami
Brandon Weiss, NAI Miami
One of the major factors of this evolution is Miami’s growth, both in population and in tourism. Between being an international vacation destination, a major cruise port, and the gateway to the Caribbean and Latin America, Miami is constantly growing. The weather and city also attracts growth. The population in Miami now is at 2.66 million and Miami Beach’s hotels reported having occupancy levels at or above 94 percent during President’s Day weekend. With this type of growth, Miami is experiencing strong consumer spending and an increase in demand for retail space. Retail vacancies are at an all-time low while rental rates are breaking records.
Currently, Miami is considered to be under-supplied per capita in retail. Over the past few years, Miami has been increasing the amount of new retail construction dramatically. Currently there are 19 new developments with over 1.1 million square feet under construction with 32 percent pre-leased. In the last year, the majority of this new construction has taken place in Doral, Downtown Miami (the Central Business District), and Brickell. These markets are changing the face for Florida retail and attracting international investors, and national and international luxury retailers. These new developments currently under construction are also providing a resurgence in existing retail rental rates. Current retail rental rates in Brickell on average are $10 more than county average (Brickell is $47.34 per square foot, Miami-Dade rental is $37.96 per square foot).
Downtown Miami and Brickell are perhaps the most notable booming retail submarkets. New mixed-use construction projects are already in full swing and providing great impact to the market, including The Forbes Co.’s Miami Worldcenter and Swire’s Brickell City Centre. Miami Worldcenter is a 10-block mixed-use development containing over 765,000 square feet of retail anchored by a 120,000-square-foot Bloomingdale’s and a 195,000-square-foot Macy’s. Brickell City Centre will contain 5.4 million square feet of mixed-use development including 500,000 square feet of retail.
When first looking at Doral, those unfamiliar to the area see the growth solely in the industrial market, due to the dredging of the port, infrastructure improvements to current highways and railways, and the expansion of the Miami International Airport. However, locals, and people in the know, realize the industrial market is only the beginning of changes in Doral.
Prominent local developers including Century Homebuilders Group, Optimus Developers, Terra and the Related Group are building projects in west Miami. Downtown Doral is a new project Codina Partners is heading, creating 2,840 residences, approximately 1 million square feet of office and 180,000 square feet of retail space.
Other notable retail submarket gems in Miami include Aventura with a vacancy rate of 1.1 percent, Wynwood Design District and Lincoln Road. In the Aventura market, rental rates are approximately $60 per square foot triple-net for well-located space on the strip centers along Biscayne Boulevard. A major mixed-use project, Aventura Park Square, is currently being built and will include a hotel, multifamily units, office space and 50,000 square feet of retail space.
With the increase in tourism, population and current supply, the retail in Miami is heating up with a few major submarkets leading the way.
— By Josh Rodstein, Senior Director, and Brandon Weiss, Director, NAI Miami. This article originally appeared in the May 2015 issue of Southeast Real Estate Business.