South Florida retail market finishes summer strongly
Behind a healthy economy and a steadily rising population, the South Florida retail market continues to boom.
Between the middle of 2005 and the middle of 2006, about 2 million square feet of new retail space opened in Palm Beach, Miami-Dade and Broward counties, according to a recent report from brokerage CB Richard Ellis, with most of it opening in Broward. Nearly 4 million square feet of space is currently under construction and expected to reach the market later this year and in 2007.
When it does, it should find a lot of interest.
The retail vacancy rates for all three South Florida counties remain below 5 percent, part of a downward trend that started in 2003 and that appears unaffected by the threat of hurricanes, according to CB Richard Ellis. As vacancy rates decline, analysts expect rental rates to rise. The average lease rate for retail space in Broward County was $18.12 a square foot by the beginning of 2006, according to CB Richard Ellis; in Palm Beach, $21.05. In Miami-Dade, it hit $23.23 a foot.
Population growth in South Florida, at a rate of 1,060 new residents a day, and a strong economic outlook — job growth has been up in all three counties in 2006 — underpin rosy retail projections, because both factors increase demand for retail space and activity. “Virtually all retail product is being quickly absorbed by the market as rapidly as it appears,” the CB Richard Ellis report concluded. “Investors and developers expect retail sites to be built in South Florida at a faster pace than in other parts of the country.”
Foreclosures spike as housing market cools
Foreclosures are on the rise in South Florida, perhaps the clearest sign the once-scorching housing sales market there has cooled.
Almost a third of the state’s 29,636 foreclosures were in South Florida in the first quarter of 2006, according to statistics from RealtyTrac. In Broward County, foreclosures spiked in the first quarter over the end of 2005 by 57 percent. In Palm Beach county, foreclosures jumped 69 percent, and, in Miami-Dade, they were up 17 percent, according to the Sun-Sentinel.
First-quarter foreclosures in the area jumped 40 percent overall from the end of 2005. Buyers who used creative types of financing, such as interest-only mortgages, to get in on the now-ended housing boom are at greatest risk of foreclosure, analysts say.
Retirement condos glutting Palm Beach market
More than 2,700 condos in Palm Beach County retirement communities are now on the market, a reflection of the aftershocks of recent hurricanes, according to the Sun-Sentinel. Century Village, just west of Boca Raton, has 282 listings, for instance, and Kings Point, west of Delray, has 255 listings; around 20 percent of those listings have been on the market for over 200 days.
Hurricanes aren’t the only contributing factor to the over-55 condo glut. Some of the buildings haven’t been updated in years and no longer appeal to existing residents or buyers. That could result in the market continuing downward and not picking up for at least another year.
Revenue boost for hotels in Florida Keys
Hotels in the Florida Keys improved their performance in May and June, continuing a recovery from last year’s hurricane-ravaged tourism season. Keys hotels increased room rates an average of 9 percent and occupancy grew 2 percent year-over-year, yielding an 11 percent gain in per-room revenues, the Miami Herald reported.
Hotels in Broward and Miami-Dade counties have enjoyed a record year, with per-room revenue up between 11 percent and 19 percent in May from the same time period in 2005. The condo conversion trend in the area, though, has left all three markets with 3 percent fewer condo-hotel rooms to sell than a year ago, which helped send room bookings down 4 percent in Miami-Dade in the past month, and down about 1 percent in Broward and the Keys.
Trump Royale project in Miami Beach receives $210M construction loan
The 391-unit Trump Royale condominium project recently received a $210 million construction loan for the 55-story project at 182-1 Collins Avenue in Sunny Isles, part of Miami Beach.
The closing date of the loan was June 28. The financing will reportedly pay for the majority of the construction of the project. Dezer Development is developing the project in addition to the Trump Organization. The Trump Royale is the third phase of the $700-million Trump Grande Ocean Resort & Residences project.