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Retailers on a rampage: Stores of all kinds hunt for space, driving up rents
- June 13, 2013
- Our People, Retail Real Estate
May 01, 2013
The high-end Bal Harbour Shops is getting a run for its money from Miami’s revamped Design District.
South Florida’s residential brokers aren’t the only ones singing a song these days. So are their retail counterparts.
Boutiques, discount giants, supermarkets, restaurants, department stores — they all need space, and they’re leasing it in Miami-Dade, Palm Beach and Broward counties.
The demand is so great in many places that the only way to fill it is new construction.
Two-dozen structures, with 297,720 square feet of retail space, hit the market in 2012’s fourth quarter and another 1.7 million square feet was under construction. Yet, even with all the building, the region’s retail vacancy rate stood at 5.8 percent — a full point below the national average, according to the CoStar Group, the commercial real estate information company.
“There are so many new venues planned and existing ones being upgraded,” said Lyle Stern, president of the Miami Beach–based Koniver Stern Group, a retail brokerage.
The Design District, a few miles north of the heart of Miami, exemplifies Stern’s point. Today, the area is being converted from a collection of art galleries and interior design shops into the chief competitor of Bal Harbour Shops, once the only place in northern Miami-Dade County to find the best-of-the-best brands such as Giorgio Armani and Bulgari. Now, the Design District is home to Prada, Cartier, Louis Vuitton, Celine, Hermès and Christian Louboutin.
All of Downtown Miami has undergone a transformation because of a population growth spurt in the last five years.
With an influx of 70,000 new residents, the neighborhood that once couldn’t support one grocery store or supermarket now has three, and a fourth — health-focused Whole Foods — is coming out of the ground, Stern said. And if those urban pioneers don’t want to eat at home, they can patronize dozens of new restaurants.
Space, too, is at a premium in the tier-one submarkets of Brickell, Aventura, Dadeland and West Kendall in Miami-Dade County and Pembroke Pines and east Ft. Lauderdale in Broward County, according to Bryan Fetherston, a broker with the Shopping Center Group in Miami.
The low vacancy rate is driving up rents. The fourth quarter closed with rates ending at $20.68 per square foot, according to CoStar; nationwide, the average rent stood at $14.43.
When the nearly 2 million square feet under construction is finished, there will be plenty of companies to gobble up the space, Fetherston said.
A handful of discount chains, for example, are looking to expand in South Florida. One is Discovery Clothing, a low-priced young women’s retailer. Also on the hunt for new locations: Aldi supermarkets and the pharmacy chains CVS Caremark and Walgreens.
Also, two power centers are planned for west Miami-Dade County. One will be anchored by Target and the other by Walmart.
“Retail,” Fetherston said, “is constantly improving in South Florida.”
Original article appeared here.