With the opening this fall of Brickell City Centre’s luxury open-air mall and a flood of new residents expected, Brickell has emerged as a sought-after retail spot.
“Retail space in the Brickell area is at a premium right now, with very little to be leased at this moment and almost nothing on Brickell Avenue perse,” said Paco Diaz, senior vice president in the retail division at CBRE. “As a result, you have seen rentral rates go from $50 to $65 per square foot a year ago to $100 to $150 now.”
“We’re really waiting for several new buildings, which will have a limited amount of retail” but will bring throngs of residents. Among them are the SLS Lux Brickell, Brickell Flatiron, Panaorama Tower and 1010 Brickell, which are slated to open in the next two years. Landlords need not worry about over-supply, as there is virtually no vacant land and the only new retail spaces will be on the ground floor of an office or condominium tower he added. “That automatically limits what can be built.”
Tenants in those new spaces will cater to the needs of residents, hotel guests and area office workers, said Scott Sheron, vice president of retail brokerage at JLL, which is leasing 11,500 square feet of ground-floor retail in 1010 Brickell, a 50-story luxury tower being developed by 13th Floor Investments and Key International.
“There is so much pent-up demand from both fine dining and quick-serve casual restaurants, because they can’t find retail will rise because of its scarcity. “I don’t know of any vacant land that is planned, permitted or under construction that is strictly retail – not a single piece.”
The lack of quality ground-floor retail limits their options,” said Mr. Sheron, who is quoting rents in the range of $125 to $175 per square foot, triple net. “People don’t want to get into a car and drive, and as these luxury towers get delivered, there is going to be even more synergy in this area, which is a walking neighborhood.”
He agrees that the value of retail will rise because of its scarcity. “I don’t know of any vacant land that is planned, permitted or under construction that is strictly retail – not a single piece.”
“At 1.4% Brickell currently has one of the lowest retail vacancy rates in all of South Florida,” said Robert Granda, director of investment sales at Franklin Street. “In 2010, Brickell had slightly more than 6% vacancy, which shows how the development through the past five years has not only attracted thousands of residents but has changed the way retailers look at the viability of the Brickell submarket.”
“With Brickell City Centre as a catalyst, the retail market in the financial district is undoubtedly in growth mode,” said Cammi Goldberg, Franklin Street director of lease and landlord representation. “Demand is strong from both high-end and service-oriented retailers. Area retail landlords are now quoting rents as high as $170 per square foot.”
“It’s true that retail follows rooftops,” said Rafael Romero, associate vice president of CREC, “but ‘rooftops’ is just another way of saying ‘people,’ and the rooftops – the people – are here.”
One of Brickell’s key advantages is public transit: it is served by Metrorail, Metromover, the Miami trolley and county buses.
” People have a negative perception of driving. As these systems become activated and people get acclimated to the idea of using them, retail only stands to benefit,” Mr. Romero said.
He represents Mary Brickell Village, one of Brickell’s first retail projects, which he calls a “true-blue lifestyle mall,” with a mix of restaurants, cafes, clubs and consumer retailers, including a grocery store. It’s a one-stop complex where people can enjoy various entertainment venues, shop and have a cell phone repaired, all without getting into a car.
“It’s up to individual landlords to bring in the right tenant mix,” he said. Once they do that, retail becomes an attractive investment. “There is sufficient demand, and there isn’t any more dirt out there.”
Brickell City Centre is the “linchpin for the renaissance of Brickell and downtown,” said Jason Shapiro, managing director at Aztec Group. “What’s coming in will change the face of retail from what’s there now.”
Among the new retailers are Armani Collezioni, BDBA, Crocus, Intermix, Koko & Palenki, Orlebar Brown, REISS and SportsActuion, according to a release from Brickell City Centre.
“You’ve got so many more residents moving in,” Mr. Shapiro said, many of whom will be young and affluent. “You will likely see more high-end, high-street luxurious retail coming in,” a phenomenon that is already in the works for Miami Worldcenter just north of downtown.
In addition, there will probably be more restaurants, lounges and other establishments catering to the new residents, hotel guests and office workers. The overflow is likely to cross the river and add to downtown Miami’s rebirth or push further south and west in Brickell, Mr. Shapiro predicted.
“There will be fiar amount of demand, because if you need to pick up something for a birthday or anniversary, you can go from work and have a good selection of retailers,” probably without getting into a car and going to a traditional mall, MR. Shapiro said. “There will be quite a bit of success. The demand is there – the supply is not.”