Retail rents are on the rise in Miami-Dade County, despite the doom and gloom surrounding retail nationwide.
A first quarter report from Colliers International South Florida shows asking rent increased to $39.59 per square foot, up 14.5 percent from $34.56 per square foot a year ago. The vacancy rate increased slightly to 3.8 percent, up from 3.6 percent in the first quarter of 2017.
About 1.9 million square feet of retail space is under construction, adding to the nearly 432,000 square feet that was delivered in the first quarter. Projects under construction include the retail component of Miami Worldcenter, parts of the Miami Design District, and smaller developments in Miami Beach, like the Trader Joe’s-anchored 17 West.
In addition to the Design District, Bal Harbour Shops and Aventura Mall are also expanding. Whitman Family Development is adding more than 340,000 square feet to Bal Harbour Shops’ existing 450,000 square feet of retail space, and the new area will be anchored by the first Barneys New York in Florida. Aventura Mall’s owners, Turnberry Associates, recently opened a $214 million new wing, which features 315,000 square feet of retail space.
Landlords will also have to figure out what to do with the large-format spaces left behind by big-box retailers going out of business. Toys ‘R’ Us, for example, announced it was closing all of its 700 locations, including 23 in South Florida.
The Biscayne corridor is facing the highest total vacancy rate in the county at 13.6 percent, according to Colliers. Asking rents along Biscayne Boulevard averaged $28.26 per square foot in the first quarter. About 44,000 square feet of space is under construction, including the MiMo Center at 6399 Biscayne Boulevard.
Brickell reported the second-highest vacancy rate at 12.3 percent. Asking rent averaged about $78 per square foot. About 45,000 square feet of new retail is under construction.
The submarkets with the highest rents were Miami Beach at $90 a square foot, which had a 4.8 percent vacancy, and Brickell.