The overall Miami-Dade retail vacancy rate fell to 5.8% at the end of 2004, down from 6% at the end of 2003. Meanwhile, the average asking rental rate for retail space in the county rose to $20.93 per sf at year-end 2004, versus $18.20 per sf at the end of the previous year. The span, however, starts at the $10-per-sf range and reaches to more than $65 per sf.

Chief among the growing retail formats, Diaz says, is ground-floor, street-level retail. "There are 31 large-scale condominium projects under construction in Miami alone," he explains, "and most of them have ground-floor retail. Developers and retailers will continue to profit by successfully balancing consumer demands with the decreasing supply of available land," he predicts. "As densities rise in areas with vertical development, ground-floor and street-front retail will become even more prevalent," he adds.

"There are also large developments offering the convenience of `work, live and play'," adds Richard Tarquinio, first VP in the same CBRE office. One example is "Metropolitan Miami," a project under development by Miami-based MDM Development Group that has 220,000 sf of retail space anchored by a Whole Foods grocery, 1,500 condo units, and 500,000 sf of office space.

"Development has also now crept to the western edge of Miami-Dade County's development boundary line," Tarquinio adds. "The growth has pushed farther south into Homestead, where some of the only developable land is left. Developers will continue to push the county to move the boundary line further west as the population increases."

There are currently eight retail centers aggregating 844,170 sf under construction in the county. An additional five centers with an aggregate of 450,132 sf are planned. That total of nearly 1.3 million sf will come on top of the existing 24.9 million sf of retail already in place in Miami-Dade. Yet, Diaz says the current trend in positive absorption should continue. "Demand will be strong enough to absorb new space, keeping vacancy relatively unchanged. However, rental rates should continue to go higher," he predicts.

Another factor impacting retail here is a change in the population base "as baby boomers over 50 are now predicted to make up more than 65% of the population by 2010," says Tarquinio. This, in part, has led to additional luxury-class retail. Neiman-Marcus, Nordstrom and Saks are among the beneficiaries. Nordstrom, which Tarquinio says had robust sales in the county last year, plans to move into the 157,000-sf space at Aventura Mall that was vacated by Lord & Taylor.

Washington, DC-based Tauber Realty is currently constructing Biscayne Commons, a 130,000-sf center on Biscayne Blvd. in the Aventura/North Miami Beach submarket. It's being built on remediated land and will be anchored by a Publix supermarket. Tarquinio says the lease rates will range between $26 per sf and $30 per sf.

The average household income in Coral Gables exceeds $97,000 a year, making that area a mecca for single-tenant, high-end retail. While there are approximately 19 multi-tenant centers there totaling 95,683 sf with an average rental rate of $24.33 per sf, single-tenant rates start at $65 per sf, according to Tarquinio.

Average rates in the East Kendall, Miami Beach, and Downtown Miami submarkets stand at the top of the overall market at $33.85, $27.50, and $26.34 per sf, respectively. Homestead and Opa Locka have the lowest average asking rates in the county at $10.36 and $10.90 per sf, respectively. None, at either end of the spectrum is expected to stand still, and the direction, in all cases, is up, say these CBRE representatives.

"The trend of excessive demand and lack of supply should continue for some time," Diaz concludes. "Expect more multi-level retail, redevelopment of existing centers, de-malling of existing centers, urbanization, street retail and ground floor retail, combined with vertical residential developments."