As South Florida’s real estate industry has been sheltered from much of the negative effects of the COVID-19 pandemic, its retail sector is thriving as migration and continued demand for retail space from many new-to-market businesses rises. But there are challenges on the horizon as low supply meets increased demand, and inflation begins to bite.
The limited amount of retail space available is also creating challenges for retailers, according to Franklin Street’s managing director of investment sales Gregory Matus.
“Vacancies are tight across all three South Florida counties, creating a highly-competitive landlord’s market and leading many retail tenants to turn to new construction,” said Matus.
Matus said he’s surprised that, despite the development in Fort Lauderdale, Broward County had the highest vacancy rate of all the South Florida counties.
Miami-Dade had the lowest with a 3.4% vacancy rate, followed by Palm Beach at 4.2% and Broward at 4.4%, according to Franklin Street’s report.
Retailers have already fully recovered and are expanding in Miami at faster rates than what’s been seen in nearly a decade. That’s according to Franklin Street’s Q4 2021 South Florida Retail Report.
“South Florida has benefited greatly from fewer restrictions and closures surrounding COVID-19. People know our area is open for business, and that has served as a boon to the retail market,” said Matus. “Additionally, because there are still restrictions around international travel, domestic travel to South Florida has increased, which is having a huge positive impact on the local retail market. Throughout the rest of 2022, we expect people to continue opening businesses and investing their money in South Florida at a substantial rate.”
Matus said he’s excited about Kendall Square, a shopping center about a 15-minute drive away from Pinecrest on Kendall Drive at 13710 SW 88th St. in Miami. The shopping center is owned by Kendall Square Investors, which is led by Adam J. Tiktin, who hired the Miami commercial real estate agency Saglo Development to handle leasing and management.
“It is a 17,545-square-foot shopping center, anchored by a free-standing Taco Bell and a First Bank, and including tenants such as Papa Johns, El Mayoral, Deco Nails and Diva’s Nectar Bar,” said Matus. “There is only one vacant 900 square-foot unit, which is available and is completely built out as a hair salon and ready for immediate occupancy.”