The Miami metropolitan area is proof that some retail real estate landlords are finding effective ways to keep brick-and-mortar stores top-of-mind for consumers, despite strong challenges by online shopping channels.
A recent Colliers International report (download here) said that there is 2.8 million square feet of retail space under construction in Miami and Dade counties. So far this year, about 800,000 square feet has been delivered. Many of these developments are in mixed-use centers that offer settings where consumers live, work and shop, putting experiential retail at a shopper’s doorstep. One of them is Regatta Harbour, in Coconut Grove, which was recently approved for a $33-million construction loan and will have 100,000 square feet of retail along with offices. Meanwhile, in the northern part of the metro, the 6.2-million-square-foot American Dream Miami is still in the planning stages.
Kimco Realty recently opened the 330,000-square-foot first phase of Dania Pointe Signature Series 93-percent leased. Its tenants include Lucky’s Market, T.J. Maxx and ULTA. The first phase is part of an overall 102-acre mixed-use development that will include more retail, apartments, offices, hotels and is scheduled to fully open in 2020.
Challenged shopping centers and vacant spaces are also seeing new life. Marcus reported that three vacant Toys “R” Us locations were recently purchased and are being used for alternative purposes in the region. The owner of PGS Tour Superstore acquired one, others were bought by a car dealership and healthcare system.
Not-so-distressed centers are also trading, though. Asana Partners acquired Sunset Harbour Shops, a 61,400-square-foot property in Miami Beach, for $68.8 million, or $1,120 per square foot, during the quarter.
At the end of the third quarter, Colliers tallied the retail vacancy rate at 4.2 percent, up 0.4 percent from the second quarter, due in part to negative absorption and just over 105,000 square feet of new development coming online. Asking rents also slid to $36.86 per square foot from $37.51 during the second quarter but were still up from $34.47 from the same year-ago period. Miami Beach has the highest area rents, averaging $91.11 per square foot.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.