Hot markets: Miami
It’s hot in Miami, really hot. Job growth in the city has been on an uptrend for 10 years. In-migration trends fuel a growing population hungry for retail; the retail vacancy rate has dropped steadily over the past two years. Big projects abound. Swire’s billion-dollar Brickell City Centre — which turned an industrial downtown district into a luxury neighborhood — opened two years ago. Now under construction is Miami Worldcenter, a 10-block mixed-use project that will add 450,000 sq. ft. of retail adjacent to the central business district.
“Miami has always been under-retailed for the population,” said Drew Kristol, senior director of Marcus & Millichap’s national retail group. “Whether downtown or in recently up-zoned high street districts like Wynwood, there’s a lot of density.”
Retail vacancies, he said, have always been sparser in Dade County versus other Florida counties, even after the 2008 economic downturn. Affluent residents continue to stream into the city, gentrifying nabes like Wynwood, the Design District, and the Latin Quarter on U.S. 1. An already low vacancy rate of about 5.6% in 2016, as a result, has slid to 4.1% this year.
There’s no dearth of retailers vying for the available space. Target, Walmart, and Dick’s Sporting Goods have all been expanding in Miami. The state’s largest grocer, Publix, has been active in providing sustenance to nascent neighborhoods with new stores.
Miami promises to be an expansion destination for many other retail chains in the near future. Some 2 million sq. ft. of retail GLA is under construction, led by the Worldcenter retail complex, which is being developed by The Forbes Company and Taubman.
“Worldcenter will create an entirely new venue,” Kristol observed. “Downtown Miami has never been renovated. It’s reminiscent of the Garment District in New York City, a lot of little electronics and luggage stores.”
At first it was edgy retailers and new restaurant concepts that took advantage of opportunities in the developing pockets of Miami, but now national chains are taking notice of America’s southernmost big city and more are likely to come on stream.
Triple Five, the owner-operator of Mall of America, will soon liven up the retail conversation. In May, Miami-Dade County commissioners approved its biggest project ever: a $4 billion-dollar, 6 million-sq.-ft. American Dream Miami retail theme park.
Miami by the numbers
2 million sq. ft.
retail GLA to be completed in 2018
average asking rent
increase in asking, down from 5.3% in 2017
population increase from 2013-2017
Source: Marcus & Millichap
On the Level: Experienced outtakes
The most enjoyable aspect of my job is talking with developers who have been in retail real estate for decades. They’ve seen it all and built it all.
The most enjoyable aspect of my job is getting to talk with developers who have been in retail real estate for decades. They’ve seen it all and built it all. Risk is as familiar to them as the family dog. I spoke with several of them in putting together this year’s Top 10 Retail Center Experiences list. Yet, with space at a premium, I had to leave out some of the best stuff. So, I turn my column over to them and the pearls left on the cutting room floor.
Irvine Co. Retail properties
I had the privilege of working with David Simon for many years. So thoughtful. So creative. But [Irvine Co. founder] Donald Bren is an equally amazing man. One of the things that makes Irvine unique is that we think of ourselves as one integrated company. We make it special for people who rent from us. If you live in one of our 10,000 apartment units, you can have dinner delivered from any one of our restaurants for less than $5. We have free shuttles for everyone to get from anywhere to anywhere — offices, residential, or retail. That’s one of the reasons we get 17 million people a year at Irvine Spectrum Center.
We were always in experiential retail. When we came to Gainesville, it was a desert. We had the first grocery store and we did anything to get people to come. We had the donkey that jumped into the pool. We had the mechanical elephant. We baked a 1,200-lb. cake to make the Guinness Book of World Records. That’s how it’s always been. That’s how I was raised.
What makes a place like Soho so exciting? It’s all these people doing different things in the same space. At Crocker Park, we have a ratio of 5-to-1 non-retail to retail. All these people come down into the same spot for some different reason. Then lace into that all of the amenities we provide — like the food kiosks we brought in from Italy — so many things we have here that have become part of the culture. Crocker Park is a submarket, it dictates its own comps and rental structure. It’s a thing unto itself.
When we bought [Plymouth Meeting Mall], it was pretty clear to us that with King of Prussia Mall and Willow Grove flanking it, the traditional retail approach was not going to work. What’s the old saying? Necessity is the mother of invention? In this case, necessity was the mother of creativity. We began to think about how we could change it from a traditional mall. About a year ago, we got the Macy’s back and now we have about half a dozen new tenants taking that space — all dining, health, and fitness. We were able to use that to catapult Plymouth Meeting into becoming something very different than a suburban mall.
There’s so much more to [the Century City renovation] than tenant curation. When you look at the collaboration with the Los Angeles County Museum of Art that lets us select and display pieces on a long-term basis, it creates an aura of authenticity around Century City. It’s not a project that will be easy to replicate. It’s authentic for the community and the culture it serves. The beauty of new platforms like this in retail centers is it gives you a wider outreach. A new shopper is coming in wanting to be part of that energy.
That’s the stuff that PowerPoint presentations are made of. So, the only thing I can add to this is to wish you all a summer of wonderful experiences.
Kendra Scott to open first Minnesota location
Fashion and lifestyle brand Kendra Scott is opening its first store in Minnesota.
Known for its bold colors, genuine stones and mixed metals in jewelry the retailer will open at Mall of America in late 2018.
“As we continue to bring first-to-market brands to distinguish our property, we also look for concepts that will resonate with our guests and Kendra Scott is one of them,” said VP of real estate and leasing Heather Brechbill Swilley.
Kendra Scott is sold at luxury retailers including Neiman Marcus, Nordstrom, Bloomingdale’s, Selfridges and over 600 specialty boutiques worldwide, and boasts a thriving online business and more than 80 namesake stores across the country.
“The expansion into the market marks a new frontier for the brand as we continue to grow,” said designer and CEO Kendra Scott.