Miami Beach will soon see the debut of two of its highest-profile retail tenants in some time: H&M, which will open a flagship space at the Lincoln Theatre in September (it already debuted a pop-up store in advance), and Forever 21. While both sell affordable clothing, the two stores share another major trait: they will have more than one floor.
In Miami Beach’s ever-tightening retail market, would-be tenants are increasingly taking second floors in the search for space.
“Global brands are going to have to look at multi-story units to be able to get the kind of selling spaces and get the presentation they want,” said Greg Masin, senior director of retail services at Cushman & Wakefield in downtown Miami. “There are probably three or four other prospective expansions in the marketplace where people are actively looking to utilize a second floor space or, in some cases, a third floor space.”
The trend, dubbed “verticality,” derives from two main factors, Masin said.
One, suburban retailers can’t get their natural floor-plates and parking spaces in Miami-Dade County, and as they attempt to go into more urban areas, they have to consider either structured parking or a facility that has two levels.
Two, for tenants like Forever 21, there was simply a need for a large store that could not be fulfilled by a single-floor Lincoln Road space.
“Today you have a lot of the larger tenants finding it’s much more cost effective to go vertical,” said Michael Comras, president of the Comras Company in Miami Beach, which has handled a number of Lincoln Road retail transactions of late, notably at 1111 Lincoln. “It also makes your store a much more interesting space.”
The two major corridors seeing verticality, a trend that Comras said largely originated in the Northeast, are Lincoln Road and the shops along on Collins Avenue.
“We did a bunch of deals on Collins —a two-level Polo store, a Banana Republic and Guess,” he said. “Those are not necessarily new, but with the larger format stores, they’re taking much larger space — those stores are typically 8,000 to 10,000 square feet on two levels.”
The Forever 21 deal, he said, involved a ground, second and third floor with escalators — more of a traditional department store format.
H&M, too, is going for a third floor, although that will be used for storage, he said. The Swedish retailer will open its permanent store in September.
“It’s something that we’ve been pushing for a while, but it’s just coming in to South Florida,” he said. “But clearly we’re seeing more and more tenants assembling larger spaces on multiple levels.”
But while verticality is more popular, it’s still much more of a necessity than a luxury, Masin said.
“Nobody chooses a second floor, because everyone would rather have their customers on one level,” he said. “It’s harder to motivate a customer to get to a level other than the ground floor. But as has been proven in many urban markets where the square footage doesn’t exist, you can get the customer to go upstairs.”