The Impending Florida Retail Boom
Florida is leading the nation in a retail recovery. Miami is particularly strong for retailers. But we ain't seen nothing yet.
Indeed, if that’s true now—and if retail truly does follow rooftops—imagine what will happen as the next wave of multifamily and condo development comes online over the next few years. I call it the impending Florida retail boom.
In the last couple of weeks alone, I’ve reported about a Walmart Neighborhood Market-anchored shopping center trading for a healthy $11 million in Largo, 530 Lincoln Road hitting the market in South Beach, several triple net deals trading, and Jones Lang LaSalle bringing three retail heavy-hitters to market.
Meanwhile, also in the last couple of weeks, I’ve reported on Novare-Batson building a $63 million multifamily tower in Downtown Orlando, Lynd and LNR buying rights to a Brickell multifamily site, a vacant mobile home park getting scooped up for a multifamily development and other deals.
Investors are clearly jockeying for retail assets as the market starts heating up in Florida. The Florida market won’t reach fever status until these condos and multifamily projects—of which there are many more than I’ve mentioned—start attracting the masses. But signs of the impending Florida retail boom are already evident.
Miami has added about 7,000 jobs so far this year, according to JLL’s Mid-Year Retail Outlook. At the same time, Miami’s vacancy has decreased 40 basis points year-over-year. Right now, smaller lease deals are getting done, but there are a few noteworthy leases, like the BrandsMart in Kendall, Nordstrom Rack in Coral Way, Kendall and Loehmann’s. And retail rents in Miami are surging, posting 7% gains year-over-year.
A quick look at other Florida retail markets also offers signs of new life. In Broward County, retail market vacancy declined 80 basis points year-over-year and 10 basis points in the last quarter, JLL reports, and Palm Beach County’s vacancy rate fell 30 basis points year-over-year.
The Orlando retail market’s vacancy rate fell 30 basis points to 7.1% year-over-year. Retail sales have been strong and demand is growing, according to JLL. And Tampa has witnessed retail vacancy rates decline 70 basis points year-over-year, with power centers outperforming other retail subtypes with a whopping 300-basis-point decline in the last year. Tampa has also seen national tenants like Walmart, Bealls, and HomeGoods expanding.
So, again, I see an impending retail boom. It’s coming. Right now, the retail is following recovering economic trends. But as the retail starts to follow the thousands of new rooftops coming to market over the next few years, it will set off the next cycle of retail development.