Retail landlords can survive the popularity of online shopping by recruiting tenants with a strong digital and physical presence in the market, according to a panel that spoke Thursday at The Real Deal South Florida’s Showcase & Forum on Thursday.
“I don’t think there’s a retail apocalypse,” said Craig Robins, president and CEO of Dacra, a leading owner of commercial property in the Miami Design District, where he’s planning to open a number of new stores and restaurants over the next year.
In addition, “we’d like to start next year on the first boutique hotel” in the Design District, said Robins, whose biggest challenge is attracting consumers who habitually shop and dine elsewhere. “It’s getting people trained to do something different … We see progress, little by little.”
“I think the retail apocalypse is greatly over-exaggerated,” said Jackie Soffer, chairman and CEO of Aventura-based Turnberry Associates, which owns controlling equity stakes in the Fontainebleau Miami Beach hotel and Aventura Mall. “We’re not going to live our lives on computers … We’re social creatures by nature.”
Some retailers mistakenly have spent heavily on their digital presence but not on their stores, she said. In switching between shopping online and in stores, “most of us now expect a more seamless experience.”
Generally, however, retail landlords have lost pricing power as online shopping surges, said panel member Jonathon Yormak, co-founder of East End Capital Partners.
Landlords face “drastic resets in retail rates” due to “vast amounts of vacancy,” said Yormak, whose firm’s properties include Wynwood Arcade in Miami’s Wynwood, the 100 Biscayne office building in downtown Miami and the 555 Washington office building in Miami Beach.
Gross rents for office space are in the mid-$50s per foot in Wynwood and the low $50s per foot in downtown Miami and Miami Beach, he said.
Yormak said the biggest challenge facing East End Capital is exercising caution as the real estate cycle matures: “We’re late in the cycle … I think everybody has to be careful in picking their spots.”
Soffer also said her biggest challenge is “being selective about opportunities.”
That is often a dinner-table topic at home, said Soffer, who is married to Robins. “We get a lot of ideas from each other.”