Retail vacancies creep up across South Florida

Retail vacancies creep up across South Florida



Across South Florida, retail landlords experienced more tenants moving out of spaces than tenants moving in during the second quarter, according to a recent Colliers report. As a result, the vacancy rate in the tri-county region took a slight hit and average asking rents in Miami-Dade and Palm Beach counties tumbled a bit. 

The high cost of construction is providing some silver lining for existing retail property owners. South Florida is seeing a slowdown in new retail development with 1.4 million square feet on tap for this year compared to 3.2 million in 2020, Colliers found. Although, retail landlords are hardly in panic mode as vacancy rates remain below 5 percent in South Florida despite the rising exodus of tenants

Miami-Dade County

In the second quarter, Miami-Dade County’s retail market faced pressures from “macroeconomic uncertainty,” the report states. Developers are currently building only 545,000 square feet of new retail due to escalating construction costs while the county experienced a net absorption of negative 178,500 square feet.

The vacancy rate creeped up in Miami-Dade to 3.2 percent in the second quarter compared to 2.9 percent during the same period last year. Accordingly, landlords slightly reduced the average asking rental rate to $43.37 a square foot compared to $44.98 a square foot year-over-year. 

The largest South Florida retail transaction this year so far took place in Miami-Dade. Simon Property Group, led by CEO David Simon, purchased the retail component and garage for Brickell City Centre for $512 million. 

In other major deals during the second quarter, Continental Realty Corporation dropped $87.5 million for multi-level retail and entertainment center CityPlace Doral and a Delaware entity paid a combined $38.2 million for two commercial condo units in Miami’s Brickell neighborhood leased to restaurants Gekkõ and RosaNegra Miami. 

The biggest second quarter lease signing in Miami-Dade involved Brandsmart USA renewing a 40,000-square-foot space at The Shoppes at Dadeland in Kendall. Crunch Fitness signed a pair of 37,000-square-foot leases at two separate shopping centers in Homestead and Miami Gardens.

Broward County

Despite a net absorption of negative 279,000 square feet in the second quarter, Broward landlords fared better due to less competition. Developers are currently developing only 306,000 square feet of new retail in Broward, Colliers found. 

Like Miami-Dade, Broward’s vacancy rate climbed slightly to 4.1 percent in the second quarter compared to 3.8 percent during the same period. Yet, tenants are paying a higher average asking rental rate of $28.52 a square foot compared to $27.78 a square foot year-over-year.

In the second quarter, investor activity in Broward was “somewhat subdued” with Eden’s $51.2 million acquisition of a Davie shopping center representing the largest transaction of the three-month period, the report states. Edens is led by CEO Jodie McLean. 

Other significant Broward deals in the second quarter were SK Realty Management’s $29.1 million purchase of a shopping center in Sunrise, and Ragnar Investments paying $17.8 million for a shopping center in Davie. 

Publix signed the largest Broward lease for the second quarter. The Lakeland-based grocer is taking 46,971 square feet at Sunrise Town Center in Sunrise. Crunch Fitness is also expanding in Broward, signing a 38,228-square-foot lease at a Pompano Beach shopping center and a 36,000-square-foot lease in a Pembroke Pines shopping center. 

Palm Beach County

Like its southern counterparts, Palm Beach County also experienced a jump in its vacancy rate to 4.4 percent in the second quarter compared to 3.6 percent during the same period last year, according to Colliers. Landlords adjusted by lowering the average asking rental rate to $28.85 a square foot compared to $29.51 a square foot year-over-year. 

Palm Beach County also experienced a net absorption of negative 92,000 square feet and only 503,000 square feet currently under construction, the report states.  

Invesco Real Estate’s second quarter $133.2 million acquisition of Marketplace at the Outlets in West Palm Beach represented the second largest retail transaction in South Florida this year so far. The second quarter’s other two biggest transactions involved Simon Property Group paying $23 million for a former Sears store in Boca Raton, and Mantovani Land & Commercial Realty’s $18 million acquisition of a West Palm Beach retail plaza. 

Two new tenants tied for signing the largest leases in the second quarter. Plum Market is taking 30,000 square feet at Prosperity Centre shopping mall in Palm Beach Gardens. PGA Tour Superstore also signed a 30,000-square-foot lease at Delray Town Center in Delray Beach. 

DUS Padel signed a lease for 26,500 square feet at Okee Square shopping center in West Palm Beach.





Source link