Miami Retail Hot: What About Broward?

MIAMI—Everyone knows Miami retail is white hot. But what happens when you travel a little further north to Broward and even Palm Beach counties?

GlobeSt.com caught up with Lisa Ferrazza, a vice president at CBRE, to get some answers. She is currently responsible for the leasing, landlord representation, expansion and new business development for 700,000 square feet of South Florida shopping space.

Her bottom line: retail vacancy in Broward and Palm Beach counties has reached a six-year low. At the same time, average asking retail lease rates have exceeded the state average by over 5%.

GlobeSt.com: What's driving the strength of Broward and Palm Beach counties retail markets?

Ferrazza: Tourism is a huge factor. Visit Florida expects a record-breaking 20 million tourists to visit both counties this year.

On top of that, the unemployment rate in Broward has dropped to the lowest rate in seven years—7.7% in Broward and 7.3% in Palm Beach—and income and earnings have risen by 5.2% compared to this time last year. That's double the national average, by the way. That, combined with below average fuel prices and rising median home values, has really shored up consumer confidence.

GlobeSt.com: Are there particular growth areas for retail in the two counties?

Ferrazza: One thing we're noticing is local, regional and national retailers moving into secondary markets, primarily in the west —submarkets such as Sunrise in Broward and Wellington in Palm Beach County—because we're running out of space closer to the ocean. For example, Wellington just got a Wal-Mart Neighborhood Market, Lucky's Market will be opening in Plantation and Trader Joe's will be opening in Davie later this year. In terms of absorption, the majority of activity this year came from fitness centers, and organic and high-end grocery retailers occupying the anchor and junior anchor spaces, and fast-casual restaurant concepts dominating inline space.

GlobeSt.com: What kind of new retail product is being delivered?

Ferrazza: With the recession well behind us, developers are busy building more commercial, residential and industrial space, and there has been a significant amount of retail redevelopment along the US 1 corridor from Fort Lauderdale to Delray Beach. Penn-Florida Companies started construction on phase one of Via Mizner, a mixed-use project located in Downtown Boca Raton that will feature 130,000 square feet of retail, and PEBB Enterprises is making progress on Buckingham Plaza, a 90,000-square-foot shopping center in Wellington. It is already 90% pre-leased, with TJ Maxx and Michaels as anchors. In Fort Lauderdale, Gatlin Development is nearing completion of Riverbed Marketplace, a 310,000-square-foot development anchored by Walmart and Planet Fitness.