South Florida retail market holds steady in third quarter

South Florida retail asking rents plateaued in the third quarter, with landlords maintaining vacancy rates in the low single digits, according to a Colliers report. 

The tri-county region experienced strong leasing activity from July through September with new tenants moving into more than 3.6 million square feet year-to-date, the report states. Grocery, apparel and home retailers are in expansion mode and testing out new concepts in smaller spaces, Colliers found. 

On the sales side, Birmingham, Alabama-based automobile retailer Dream Motor Group cruised into the Miami-Dade County market by acquiring a four-property portfolio that includes two Mercedes-Benz dealerships for $150 million. The biggest deals in Broward and Palm Beach counties involved a pair of shopping centers trading for $56 million and $88.3 million, respectively. 

Miami-Dade County

Occupancy remains at nearly full capacity in Miami-Dade County. The vacancy rate hit 3.3 percent in the third quarter, compared to 3.2 percent during the same period of last year. 

The average asking rent hasn’t moved much, year-over-year. In the third quarter, landlords were asking for an average of $43.33 a square foot, compared to $43.56 during the third quarter of 2022, Colliers found. 

Still, Miami-Dade saw a jump in leasing activity, year-over-year. In the third quarter, net absorption was 723,602 square feet, compared to 259,639 square feet absorbed during the same period of last year, the report states. The county currently has 1.9 million square feet of new retail space under construction. 

Big Lots signed the largest lease in the third quarter, renewing a deal for a 36,496-square-foot, single-story building at 18325 South Dixie Highway. There’s also an influx of star power in Miami-Dade’s restaurant circuit. Gordon Ramsey’s Hell’s Kitchen opened in a 16,000-square-foot space in the Muze at the Met apartment tower in downtown Miami. Ramsey had previously signed a lease to open in Miami Beach’s South of Fifth neighborhood, but that deal fell through. 

Broward County

Retail occupancy in Broward is also at near full capacity. In the third quarter, the vacancy rate dropped to 3.5 percent, compared to 4.1 percent during the same period of last year, according to Colliers. However, asking rents barely budged, year-over-year. Landlords asked for an average of $26.69 a square foot in the third quarter, compared to $26.72 a square foot during the same period of last year. 

Net absorption fell to 447,473 square feet in the third quarter, compared to 610,000 square feet absorbed during the same period of last year, the report states. New retail under construction will add 456,000 square feet of space. 

Amped Fitness signed the largest lease, taking 31,338 square feet at Pompano Citi Centre, a shopping center in Pompano Beach. Barnes & Noble followed, signing a lease for 16,050 square feet at Sawgrass Square, a retail plaza in Sunrise. 

Apollo Global Management’s $56 million purchase of 16000 Pines Market, a Publix-anchored shopping center in Pembroke Pines, represented the largest retail sale during the third quarter. 

Palm Beach County

Occupancy remains high in Palm Beach County with the vacancy rate hitting 3.6 percent in the third quarter, relatively unchanged from 3.7 percent rate during the same period of last year, the report shows. 

Yet, landlords pushed the average asking rent up to $30.10 a square foot in the third quarter. During the same period of last year, the average asking rent was $27.90 a square foot. 

Fewer new retail spaces led to a drop in net absorption to 183,076 square feet, compared to 924,915 square feet absorbed during the same period of last year, the report shows. Currently, 491,068 square feet of new retail space is under construction. 

In the third quarter, Whole Foods signed the largest lease for a 37,500-square-foot store at Uptown Boca, a mixed-use project in Boca Raton. Eos Fitness signed the second-largest lease for 30,140 square feet at Legacy Place, a strip mall in North Palm Beach. 

Edens, a real estate investment firm with regional headquarters in six cities, including Miami, clocked in with the largest purchase of the third quarter. Edens paid $88.3 million for Shadowood Square, a shopping center near Boca Raton.