Occupancy rate dips under 90% in Boca Raton after Kmart closure

The average retail occupancy rate of shopping centers in the Boca Raton submarket of Miami dropped to 89.3% in the last quarter, according to a new report.

11th Street Capital made physical visits to all 81 centers in Boca Raton and discovered more than 700,000 sq. ft. of vacant space, including six big-box stores and two junior boxes. Occupancy fell 120 basis points since Q2, something the investment firm attributed mainly to the closing of the Kmart at Palmetto Park Square.

The company reported, however, the market registered a positive absorption of 15,000 sq. ft. over the past six months when Kmart was removed from the equation, indicating that the affluent community is still popular with national retailers.

More than 100,000 sq. ft. of vacant space is expected to be filled within the next six months, which should lift the submarket’s occupancy back above 90%, the report said. The median occupancy rate is currently 96%, meaning that half of the centers are at least 96% rented.

In Spring 2020, Schmier Property Group and Rosemurgy Properties will open Uptown Boca, a 38-acre mixed-use development with 155,000 sq. ft. of retail. Tenants will include Silverspot Cinema, Lucky’s Market, and Chick-fil-A.

A new Publix Greenwise is scheduled to open in December at Lakeside Centre and 11th Street Capital researchers noted several “Coming Soon” signs up at Mizner Park.

11th Street Capital CEO Joshua Ladle was not mourning the loss of the Kmart in Boca.

“Kmart never really seemed to do very well here and was just taking up valuable real estate at a cheap rent. Now that the owners of the center have this box back, they have a blank slate to transform this center into something truly remarkable,” Ladle said.