KISSIMMEE, FL—There's a new type of luxury overtaking Florida, and as JLL's retail expert Justin Greider explains it, the impact it's having on the Sunshine State can't be overlooked. In this exclusive interview, GlobeSt.com finds out about how visitors flocking to the state continue to spur retail sales and give the sector an extra boost in revenue. Greider takes a deep dive into how tourism is impacting the retail real estate sector in the top Florida destinations, Miami and Orlando.

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GlobeSt.com: What's driving Miami tourists shopping habits?

Justin Greider: Miami set record-high visitor rates in 2013 with more than 14 million tourists flocking to the city, of which more than half poured in from outside the United States. These international visitors spent nearly $9.4 billion on retail related purchases last year, or about $1,400 per person.

There are two factors making this rate of spending so much higher than comparable tourist markets. First, international visitors, the majority of which come from Latin America, are making day-to-day purchases while on vacation due to the lack of availability and higher prices for goods in their home countries. Retail related spending for Latin American tourists in Miami alone has grown nearly eight percent annually since 2009.

Second, Miami has emerged as one of the leading luxury shopping markets in the world. Miami is the only market in the southern U.S. where we are seeing luxury retailers strategically seeking locations to capture their share of tourists spending by opening multiple locations in the same market. The Miami market boasts two malls with the highest sales in the country, and with three major retail projects under construction to target these luxury retailers and shoppers.

GlobeSt.com: How does all this spending translate to real estate?

Greider: Retail related visitor expenditures currently support more than 37 million square feet of retail or roughly 34 percent of all retail space in Miami-Dade County. As tourism continues to drive the market, we expect vacancy rates to continue to compress, and owners have a great opportunity to improve their NOI and, in some cases more importantly, the quality of tenants. Throughout the recovery, there has been a greater delineation between top-performing Class A retail space, and B and C centers. As the market tightens, we expect redevelopment to pick-up pace as owners make improvements to upgrade their assets and capitalize on this surge of spending and the consequential demand from retailers.

Additionally, spending on food and beverage continues to grow with international and domestic tourists, as well as residents. This is creating a dramatic shift in the tenant mix for shopping centers with restaurants being more heavily weighted than in the past. We expect there to be organic growth of new concepts in the market, but also a huge influx of chains from Northeast and Midwest targeting Greater Miami's tourist base.

GlobeSt.com: While visitors to Miami spend more per person and per trip, Orlando is the top tourist market by visitor count in the country – how do travelers impact the retail landscape?

Greider: Orlando attracts more than four times the number of visitors than Miami at 59.2 million. This broader visitor profile is drawn to Orlando's varied offerings for accommodations and activities which range across the budget spectrum, thus making it a top choice for travelers. This is reflected on the retail side, where a luxury mall and two major outlet malls provide a wide range of options for shopping, from value-oriented to mainstream retailers.

GlobeSt.com: Overall, how do you expect tourism to continue in the years ahead?

Greider: Tourism in recent years has surpassed expectations, resulting in the major theme parks and convention hotels in Orlando announcing additional future expansions. The continued growth in tourists, and corresponding desire for retailers to capture some of this lucrative spending category, should continue to push demand for retail space, outpacing traditional retail locations.

GlobeSt.com: What's your advice to retailers and owners looking at the Florida Market?

Greider: For retailers, we recommend being aggressive obtaining space in the premier locations, even if it means higher rents to secure the space. The success of retail locations has bifurcated significantly between the A and B locations in the tourist corridors. Additionally, while the memories of the last downturn are beginning to fade, one important thing we learned was that these “A” locations will better weather any hiccups in the market.

For owners, today is a great time to be investing in properties, both those they plan to hold and those they are buying. The return on investment should be greater for the next few years as these investments will make properties more attractive to the top-tier tenants—who have better credit and will pay more to be in a center because they can drive greater traffic to their stores.

Instant Insights /

Foreign Shoppers Stock-up on Goods (and Sunshine) in Florida

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