Hot markets: Miami
It’s hot in Miami, really hot. Job growth in the city has been on an uptrend for 10 years. In-migration trends fuel a growing population hungry for retail; the retail vacancy rate has dropped steadily over the past two years. Big projects abound. Swire’s billion-dollar Brickell City Centre — which turned an industrial downtown district into a luxury neighborhood — opened two years ago. Now under construction is Miami Worldcenter, a 10-block mixed-use project that will add 450,000 sq. ft. of retail adjacent to the central business district.
“Miami has always been under-retailed for the population,” said Drew Kristol, senior director of Marcus & Millichap’s national retail group. “Whether downtown or in recently up-zoned high street districts like Wynwood, there’s a lot of density.”
Retail vacancies, he said, have always been sparser in Dade County versus other Florida counties, even after the 2008 economic downturn. Affluent residents continue to stream into the city, gentrifying nabes like Wynwood, the Design District, and the Latin Quarter on U.S. 1. An already low vacancy rate of about 5.6% in 2016, as a result, has slid to 4.1% this year.
There’s no dearth of retailers vying for the available space. Target, Walmart, and Dick’s Sporting Goods have all been expanding in Miami. The state’s largest grocer, Publix, has been active in providing sustenance to nascent neighborhoods with new stores.
Miami promises to be an expansion destination for many other retail chains in the near future. Some 2 million sq. ft. of retail GLA is under construction, led by the Worldcenter retail complex, which is being developed by The Forbes Company and Taubman.
“Worldcenter will create an entirely new venue,” Kristol observed. “Downtown Miami has never been renovated. It’s reminiscent of the Garment District in New York City, a lot of little electronics and luggage stores.”
At first it was edgy retailers and new restaurant concepts that took advantage of opportunities in the developing pockets of Miami, but now national chains are taking notice of America’s southernmost big city and more are likely to come on stream.
Triple Five, the owner-operator of Mall of America, will soon liven up the retail conversation. In May, Miami-Dade County commissioners approved its biggest project ever: a $4 billion-dollar, 6 million-sq.-ft. American Dream Miami retail theme park.
Miami by the numbers
2 million sq. ft.
retail GLA to be completed in 2018
4.1%
vacancy rate
$35.82
average asking rent
1.9%
increase in asking, down from 5.3% in 2017
107,862
population increase from 2013-2017