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MIAMI-Due to its strong demographics and positive fundamentals, the retail market will remain strong, according to the Marcus & Millichap National Retail Research Report for 2006.

Among findings of the report are that the local employment base is expected to expand by 1.5% in 2006, with the addition of 15,400 jobs. This growth is among reasons retail development has been expanding, with approximately 1.1 million sf of retail space is scheduled for completion in 2006, according to the report.

Despite the expansion, the vacancy rate is forecasted to drop 10 basis points to 3.5% by the end of the year. Miami landlords are expected to leverage these conditions to raise rents 4% to an average asking rate of $22.88 per sf by year’s end. The high level of investor interest has also put upward pressure on sales pricing with the median price for single-tenant properties jumping 25% to $249 per sf, the report states.

The report’s outlook is positive despite Miami dropping four places on a list of nationwide retail markets tracked by Marcus & Millichap. Of the 42 retail markets the report tracks, Miami ranks No. 20. San Diego and Orange County, CA are ranked No. 1 and 2. “The retail vacancy rate has tightened considerably in the past few years,” says Kirk Felici, regional manager of the firm’s Miami office. “The combination of continued growth and limited new construction bode well for owners and investors.”

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