Miami-Dade, Palm Beach retail markets soften in Q3: report
Rents rose in Miami-Dade and Palm Beach, fell in Broward
South Florida’s retail markets were a mixed bag in the third quarter amid mass closures of big box retail stores across the country, according to tri-county reports from Colliers International South Florida.
Retail vacancy rates rose slightly in Miami-Dade and Palm Beach counties while asking rents increased, compared to the third quarter of 2016. In Broward, the average vacancy rate fell while the asking rent budged forward.
Vacancy rates increased year-over-year in Miami-Dade, up to 3.6 percent in the third quarter of this year from 2.9 percent last year. Vacancies slightly declined from quarter to quarter, down from 3.7 percent.
So far this year, nearly 188,000 square feet of new retail space was added to the market, mostly as part of mixed-use developments. Projects underway include The Esplanade at Aventura, a mixed use project that will replace the former Sears at Aventura Mall with 315,000 square feet of retail, restaurants and entertainment tenants. About 2.3 million square feet of retail space is currently under construction.
Aventura and Coral Gables reported the lowest vacancy rates in the county at less than 1 percent. Rents in Aventura were asking $39.83 per square foot and in the Gables, $40.88 per square foot, according to the report.
Overall in Miami-Dade, rents averaged $37.55 per square foot in the third quarter, up from $31.20 per square foot a year ago.
Broward’s retail market reported record low vacancy rates during the third quarter, down year-over-year to 3.6 percent from 5.6 percent. About 86,000 square feet of retail space has been completed so far this year and an additional 530,000 square feet is under construction.
Asking rents averaged $19.28 per square foot this quarter, down from $19.90 per square foot a year ago.
Sawgrass Park had the lowest vacancy rate in Broward at 0.5 percent. Asking rents in Sawgrass Park averaged $27 per square foot. Southwest Broward and Commercial Boulevard followed with a 2.7 percent vacancy rate and per-square-foot asking rents of $15.45 and $23.18, respectively.
Mixed-use projects with large retail components include Kimco Realty Corp’s Dania Pointe, Terra’s Pembroke Pines City Center and Pines Market and Joseph Kavana’s Metropica development in Sunrise.
Palm Beach County
In Palm Beach County, the vacancy rate dropped year-over-year to 4.4 percent, down from 5.1 percent a year ago, according to Colliers. Rents rose slightly year-over-year to $20.48 per square foot from about $19 per square foot.
Boca Raton, home to Town Center at Boca Raton, reported the lowest vacancies at less than 2.1 percent.
In Palm Beach County, about 68,000 square feet of retail space has been completed this year with nearly 657,000 square feet under construction, according to the report.
Investment sales slowed in the third quarter compared to the first half of 2017. About $430 million of deals closed in the first two quarters, and only $66 million closed last quarter. In September, following Hurricane Irma, the LA Fitness Plaza in Palm Beach Gardens traded hands for $25 million.