Visionary brokers and developers analyze Miami’s dynamic retail real estate market
On Sept. 21, 2016, at the Four Seasons Hotel, journalist Emon Reiser of the South Florida Business Journal moderated a panel that included Michael Comras, Principal, The Comras Company of Florida; Kristin Mueller, COO of Jones Lang LaSalle’s retail group; Tom Roth, Principal, Grass River Property; and Sara Wolfe, Senior Managing Partner, Koniver Stern. Both Comras and Roth are involved in redevelopment initiatives for Cocowalk in Coconut Grove and The Shops at Sunset Place in South Miami.
Panelists agreed that malls are here to stay, although the use of space inside them is changing. As retailers shrink their square footage, other businesses are entering malls—restaurants and specialty food sellers, fitness centers, financial services, and health care facilities. Responding to consumer demand, anchors like Macys and Bloomingdales have embraced online shopping and are converting some merchandising space to fulfillment as technology changes how customers select, purchase, and take possession of goods they want. Nationwide, Miami is 8th highest in construction and development of retail properties and panelists agreed that Miami is still underbuilt considering its population and demographics.
Kristin Mueller said Miami is the world’s most coveted retail locale, despite an Industry-wide slowdown. It commands the US’s highest sales per square foot (psf) and Miami’s 3% retail vacancy rate compares favorably with 7% in Atlanta and 3.7% in New York City. Retail rents average $32 psf here versus $16 psf nationally. Mueller, who noted that luxury goods are as important in Miami as they are everywhere, listed top categories as food, entertainment, value for money, health/fitness, safety/security, and services. Reversing a long-held trend, Americans now spend a higher percentage of income on out-of- home food than on groceries.
Asked what his team looks for when analyzing properties, Tom Roth said besides running rigorous financial and zoning analyses, they want to know the allowed uses for a property’s upper floors, to get the highest and best use from a market standpoint. “The ideal tenant mix depends on target audiences, such as night-time foot traffic, residents, or tourists.” Citing the Shops at Sunset Place, Roth said it sits on 9.5 acres at a busy crossroads but doesn’t meet the demands of the local year-round audience. “At both Sunset Place and CocoWalk, we’re reevaluating the tenants with the community in mind, and will convert some retail spaces to other uses.”
Mike Comras, whose leasing activity helped energized Collins Avenue and Lincoln Road, believes that to succeed, retail must change daily, because creating interesting environments is key. “Retail centers have to be interesting enough to get people off the couch and going to restaurants, fitness centers, and supermarkets. Creating a mixed-use environment is where the world is going; people come out for entertainment,” he said, adding that everyone wants a bargain– value for money. When local restaurants are squeezed by upward-spiraling rents, Comras said they sometimes move elsewhere and energize new places. “Restaurants are like Broadway shows. They have their run, then they close, and something else replaces them.”
Sara Wolfe described forces that generate newly vibrant retail settings, for example, heavy traffic that makes consumers stay near their jobs after work. This leads to eating and entertainment establishments entering those environments. Physical redevelopment on Lincoln Road and Miracle Mile, and new construction in Wynwood and the Design District, indicate retail strength. She identified Allapattah, immediately west of the UM/Jackson health district, as an up-and- coming retail district. Panelists also mentioned North Beach and the Harding Avenue/Surfside areas as zones to watch.