A map of 1450 Brickell and retail stores in the surrounding area (click on the image to see a larger version)
Giovanni Tummolillo saw it coming with the explosion of condominium and office developments in Miami’s Brickell Financial District during the boom years.
The general manager of the posh restaurant lounge Sci Sci at Brickell, which opened in September, knew people would eventually fill those skyscrapers. And all those new condo dwellers and added office workers need places to eat, play and work out.
Tummolillo believed enough in the area that after closing the Sci Sci in Coconut Grove, he and several partners invested $2 million in the Brickell space. He went from having about a 2,000-square-foot restaurant that seated 140 to a new one that could sit about 250 people with 3,500 square feet inside and a 2,000-square-foot terrace. So far, business hasn’t disappointed.
“It’s been very good — very, very good,” Tummolillo said.
As more people continue to move into Brickell, retailers are scooping up space even as many other retail markets are taking a recessionary hit with increased vacancies. In fact, Brickell-area vacancy rates dropped to about 5 percent in the third quarter of last year from nearly 13 percent in the first quarter of 2008, according to the most recent data from CoStar.
“Retail follows rooftops,” said Leo Zabezhinsky, real estate and business development manager at the Miami Downtown Development Authority.
In addition to Sci Sci, new additions to the area include the Brickell Irish Pub, Pieduck’s Pizza and Sushi Siam. LA Fitness plans to open a new gym there as well this year. It’s all adding up to a new live, work and play downtown Miami city leaders have sought for years.
“There were a lot of visionaries,” Zabezhinsky said.
The city laid the foundation with policies that allowed developers to come in and double the number of residential units in the area to about 8,500 new units, Zabezhinsky said. Every month, there are about 500 new leases being signed or sales transactions closing, he said.
It wasn’t always clear that residents would come. Critics questioned whether in a car-crazed South Florida people would move downtown. And as the building boom peaked, few could afford many of the new condos that went up.
But the market crashed and prices plummeted allowing more young professionals to afford downtown living, whether buying or renting.
“We are now truly becoming a 24-hour city,” said Danet Linares, executive vice president at Blanca Commercial Real Estate, which is the exclusive leasing agent for 1450 Brickell office tower.
Most of the space fronting Brickell Avenue has filled up, she said. As these spaces fill, building owners and investors will come in and start redeveloping existing spaces to meet the need, she said.
“I think it’s going to get extremely tight in the next couple of years,” Linares said.
Already rents are starting to rise. CoStar data shows that in the first quarter of 2006 it cost $35 per square foot to lease retail space in Brickell. That number jumped to $44 by the third quarter of 2009.
Even so, Jason Press, a retail broker at Continental Real Estate Companies who is working on a couple of Brickell-area deals, said there’s room for more growth. Mostly restaurant and services users have moved in, which is what you expect at first, he said.
Brickell still needs apparel retailers and moderately-priced casual dining. It could use a gourmet grocer, he said. Once development picks up again, he expects to see larger retail projects.
“You need a theater,” Press said.
Tummolillo of Sci Sci agrees that Brickell will continue to grow.
“Brickell is still in the embryonic stage,” he said.