Coconut Grove’s Restaurant Scene Faces $1 Million Rents

Coconut Grove’s evolution into one of Miami’s hottest dining scenes came at a cost, as soaring rents have threatened or shut down restaurants that helped transform the neighborhood into a dinner destination.

The area once seen as a bohemian enclave had average direct asking retail rents of more than $110 per square foot in the second quarter, one of the highest of any Miami-Dade submarket, according to Colliers.

That’s more than double rent prices of a decade ago, when the average was $45.50 per square foot. Chef and restaurant owner Michael Beltran, who is from Miami-Dade, debuted his first concept in the Grove in those days.

The owner of Ariete Hospitality Group, he opened Ariete in a 2,400-square-foot commercial space at 3540 Main Highway in 2016, making an “11th hour” decision to bet on Coconut Grove when much of the neighborhood’s restaurant mix was dominated by chains like Fat Tuesday, Wet Willie’s and Señor Frog’s.

People said he was “nuts” at the time for opening a fine-dining restaurant in the neighborhood, but the gamble paid off.

Ariete became the Grove’s first Michelin-starred restaurant when the Michelin Guide launched in Florida in 2022. It has retained its star every year since and is now one of two Michelin-starred restaurants in the neighborhood, alongside Mexican eatery Los Félix.

The success of Ariete led him to open Chug’s Diner, Chuggie’s, The Taurus and, through a partnership with Mae’s Group, Drinking Pig BBQ and the cocktail lounge Mae’s Room.

Beltran declined to disclose what he pays for rent at his restaurants but said he’s grateful he locked in a long-term lease with his local landlords for Ariete before the neighborhood’s real estate boom.

The affordable rents that once drew independent restaurateurs have become far more difficult to find, he said.

“The inventory is depleted,” Beltran said. Restaurants “keep signing these bad leases, because we think that there’s a pot of gold at the end. New people come in and they buy a building at an exorbitant rate, and then they expect us to pay the rent so that they could pay their mortgage and pay the bank back. That’s the problem.”

Delivering landlord profits

Timo Kipp’s Whalou Properties owns the 288,000-square-foot mixed-use complex Mayfair in the Grove. He bought the property from Deutsche Bank in 2010 for $37.8 million, or $131 per square foot, when Coconut Grove looked nothing like it does today, he said.

The property is at 3354 Mary Street, 2901 Florida Avenue and 2911 Grand Avenue — adjacent to the 179-key Mayfair House Hotel & Garden, where Kipp also owns a retail unit.

One of Kipp’s most notable restaurant tenants to open in the Grove is Carbone Vino, from New York-based Major Food Group.

The restaurant signed a 10,000-square-foot lease at Mayfair for over $100 per square foot in fixed rent in addition to a revenue-sharing agreement, he said. That works out to at least $1 million a month. Carbone Vino’s menu includes a $24 chopped salad and an $84 ribeye. Its lease at 2911 Grand Avenue began in June 2022, and the restaurant launched in December 2024.

The rent at a space Kipp co-owns at 3390 Mary Street has ballooned as well. It leased for $50 per square foot five years ago, and it recently leased for three times that, he said. Rents at Mayfair have more than doubled in that time, he said.

The same corporate migration, office leasing and redevelopment that brought daytime workers and investment into the Grove boosted the neighborhood’s retail resurgence, Kipp said.

With a limited amount of retail space available in the Grove, rising demand pushed rents higher, said Ryan Brodsky, a retail broker with Colliers.

The imbalance is so pronounced that Brodsky likened the market to a waiting list. Despite the rapid rent growth, he doesn’t expect a correction.

Instead, Coconut Grove’s affluent customer base and limited inventory allow landlords to be highly selective, curating their tenant mix rather than leasing to the first available occupant, he said.

Rent squeeze, restauteur-to-developer

The Grove’s success was built in part by other local restaurateurs, like Kush Hospitality’s Matt Kuscher, who were willing to take chances before the neighborhood became one of Miami’s hottest retail districts, Beltran said.

Starting in 2011, Kush operated restaurants at 3190 Commodore Plaza that included Lokal and Vicky’s House. Vicky’s House, a retro milkshake bar, later became a bar, Victoria’s Vinos & Vermouth, before reopening as the lasagna concept Si Papa through a partnership with 84 Magic Hospitality last year.

The space was vacant at the end of June, though 84 Magic plans to relocate Si Papa, which served a stripped-down menu of lasagne, tiramisu and wine by the glass.

Landlord ABL Real Estate’s entity bought the 3,200-square-foot property for $3.9 million, or $1,219 per square foot, in September, property records show. The company did not respond to interview requests.

Kuscher said on social media in March that he would have loved to stay longer, but “the rents were raised 50 percent.” He was not available for comment.

“We were lucky that guys like Matt Kuscher did what he did in the Grove,” Beltran said. “Instead of being rewarded for all the time and effort that he put there, he got pushed out.”

It would take a restaurant doing “crazy numbers” to make it in that location now, he said.

Meanwhile, Kuscher is going the owner/operator route, becoming his own landlord and acquiring a taste for development on the way. He bought the 7,500-square-foot space at 2003 North Miami Avenue in Wynwood for $2.6 million, or $347 per square foot, in 2022 with plans to reopen Kush this summer. He also was a partner in developing 10 workforce micro units in the building.

“I want to be the king of affordable housing and restaurant mixed-use in Miami,” Kuscher said in a statement. “This is just the beginning.”

The apartments were developed in partnership with the Omni Community Redevelopment Agency with support from the Public Benefit Trust Fund, and will be available to hospitality workers across Miami, not just his own staff. Kush also has a Brickell location.

Real estate investment accelerates restaurant rents

Coconut Grove’s evolution into one of Miami’s wealthiest hubs has mushroomed alongside an influx of billionaires and institutional investors flocking to the Magic City.

The once bohemian Grove’s resi market is over the top.

Billionaire Citadel founder Ken Griffin has poured cash into Coconut Grove’s resi market, paying a record $106.9 million for a bayfront estate in 2022. The neighboring property listed this year for $110 million. Google co-founder Larry Page assembled nearly $200 million worth of properties in the Grove this year.

Developers have rushed to capitalize with luxury condo projects including Terra’s 13-story, 39-unit The Well Coconut Grove, CMC Group’s redevelopment of the former Grove Isle resort and the developer’s joint venture with Fort Partners for the Four Seasons Coconut Grove.

On the commercial side, hedge funds and private equity firms are grabbing hold of the Grove.

Billionaire Paul Singer’s Elliott Investment Management teamed up with Lifestyle Hospitality Capital Group to buy the hotel-condo portion of Mayfair House from Brookfield Asset Management last month for $110 million.

Federal Realty Investment Trust became the sole owner of CocoWalk two years ago, acquiring the remaining stake of the 198,000-square-foot outdoor shopping center from the Comras Company and Grass River Property for $12.4 million — almost ten years after it paid $87.5 million for 80 percent interest. The combined deals priced the property at $505 per square foot.

Despite the growing interest from institutional investors, most of Coconut Grove’s retail real estate is still controlled by longtime private owners, Brodsky said.

“Everyone wants to be in Coconut Grove, but there’s not too many sellers,” Brodsky said.

The neighborhood’s retail boom accelerated with the wave of post-pandemic migration that reshaped South Florida’s housing market. As affluent buyers relocated to Miami, demand for restaurants and retailers followed, particularly in established neighborhoods like Coconut Grove.

But the neighborhood’s success inevitably became a pain point for restaurateurs who kept Coconut Grove cooking before the boom.

“The evolution of the Grove has been great, but also there’s some parts of the Grove that are selling out,” Ariete’s Beltran said. “Soon the per square foot is only going to pertain to ‘let’s open up four Salt & Straw and four Sweetgreens.” (Coconut Grove has one Salt & Straw and one Sweetgreen, which are next to each other.)

“A mom and pop is not going to be able to pay that.”