Despite statewide trends, Miami-Dade shopping centers are providing tempting development opportunities for commercial real estate developers.
Miami-Dade county vacancy rates are lower and occupancy rates are higher than anywhere else in Florida. With occupancy rates above 90 percent and rental rates above $18 per-square-foot, Miami has seen a decrease in retail vacancy rates for five straight quarters – a recovery not seen in many markets across the country.
A report by Crossman & Company was presented at the International Council of Shopping Centers Florida that showed Miami-Dade County’s average rental rate clocking in at $21.84 and occupancy at 94.1 percent. These numbers come as a surprise to many who know that Miami-Dade County also has a near record unemployment rate of 13 percent and wilting consumer confidence that is similar to what is seen statewide.
In comparison, Broward County’s average rental rate is $17.69 with occupancy at 89.6 percent while Palm Beach County’s rates are at $18 and occupancy is at 89.2 percent.
According to Greg Masin, senior director of retail services at Cushman & Wakefield, a commercial real estate firm, “Miami is on fire. The phone is ringing with retailers who want to be here. Some people are still hurting, but in general this town is healthier than people give us credit for.”
For the first time in years, developers are seeing an opportunity for new development in Miami-Dade. Several South Florida developers are pitching retailers on plans for construction of new shopping centers, something that has been unheard of since the nationwide recession. Many of the pitches are aimed at discount retailers and grocery stores – businesses that have remained relatively strong since the economic downfall.
At the conference, businesses such as Walgreens, Publix, Walmart, LA Fitness, Bealls Department Stores, Sedan’s Supermarkets, Tuesday Morning and Pet Supermarket were among the retailers looking for additional space. According to The Miami Herald, other popular categories were yogurt stores, fast-casual restaurants and any kind of dollar store.
Despite the increased interest in Miami-Dade commercial development, as usual, price remains a sticking point during negotiations. Real estate manager for Walgreen Company, Brenden O’Brien, said, “Some people are still looking to get face value for their dirt; it’s just not worth it. The prices have come down, but just not to the level I’d say my real estate committee would like to see it.” Many developers remain cautious despite the potential Miami-Dade appears to be presenting.
According to a retail index based on sales tax tracked by the Florida Legislature’s Office of Economic and Demographic Research, sales remain strong with a posted 9 percent gain in sales for May in Miami-Dade County despite the continuing economic uncertainty. This is the highest reading since April 2007.
Source: The Miami Herald