With almost 2.5 million square feet currently under construction in Miami-Dade County, it seems that retailers have confidently adjusted to their consumer’s needs. Since last year, more than 2 million square feet of new retail developments have been added to Miami-Dade’s inventory shifting to more experiential and innovative concepts. Net absorption has been keeping pace with construction.
With continued strong market activity and record-low vacancy rates throughout the County, Broward remains one of the most appealing retail markets for new development. Several large scale mixed-use projects are underway in Broward County including Dania Pointe, Pembroke Pines City Center and Metropica in Sunrise. These developments reflect a shift away from the traditional retail shopping centers toward more experiential concepts that offer entertainment, amenities, residences and office space as anchors to draw tenants and patrons. The excitement surrounding these new developments is reflected by strong pre-leasing activity. A low vacancy rate and strong demand translates to limited concessions for tenants.
Market indicators in Palm Beach County continue to improve in the third quarter. Average retail rents have increased 780 basis points year-over-year to $20.48 per square foot while vacancy rates continue to compress. A positive net absorption this quarter reflects the market ability to rapidly back-fill any vacated space with new tenants and absorb new inventory delivered to the market. Year-to-date, investor interest in retail property has been high in Palm Beach County, however, fewer deals were closed this quarter. Approximately $430 million worth of retail trades closed in the first and second quarter of 2017. In the third quarter, just over $66 million traded. Publix remains active and continues to pick up Publix-anchored plazas throughout South Florida.
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