Positive activity in the Christmas rush has retailers starting to sing a happier tune. After several years of struggles in the downturn and several high-profile exits by big-box retailers, South Florida’s retail market is starting to turn the corner.
This year saw 10 leases of more than 31,000 square feet, with eight of over 40,000 feet, a sign that activity is revving up, according to data from real estate research firm CoStar covering South Florida’s largest leases of 2010.
“There’s some decent activity [in South Florida],” said Chris Macke, senior real estate strategist at CoStar. “It’s nice to see some 50,000-square-foot deals.”
The largest retail lease in South Florida in 2010 was a 67,899-square-foot agreement by Burlington Coat Factory in the Lauderdale Lakes Mall, followed by a lease for L.A. Fitness in Palm Springs Mile in the Hialeah/Medley area.
According to CoStar, South Florida’s retail market has seen positive absorption across the board, with vacancies dropping in Miami-Dade, Broward and Palm Beach counties.
Overall, vacancies in Miami-Dade, which saw three of the year’s top 10 leases, is down to 4.7 percent from 4.9 percent in the third quarter of last year. After the LA. Fitness deal, the largest lease in Miami-Dade’s retail market this year was T.J. Maxx in the Greenery Mall in Kendall for 47,000 square feet.
That was followed by a 44,268-square-foot lease, also in Kendall, at the shops at Dadeland, by electronics retailer Brandsmart.
Broward County saw three other deals in the top 10, with leases of more than 31,781 square feet in Pompano Beach and Coral Springs.
Palm Beach’s market, which struggled the most in South Florida, saw its vacancy drop to 8 percent from 8.3 percent, according to the CoStar data. The county was topped by the entrance of electronics retailer hhgregg into South Florida in a 41,520-square-foot lease at Nassau Square in Royal Palm Beach.
Palm Beach saw negative absorption in the third quarter of 2009.
The flurry of activity in Palm Beach means that market is in a much better position than a year ago, Macke said.
“The low amount of new construction, combined with the leasing activity, gets the market back to a healthier place,” Macke said. “We are not blowing the doors off, but the leasing activity that has occurred is a heck of a lot better than what we’ve seen in the recent past.”