Commercial Real Estate, Capital, Insurance, Leasing & Management

Shopping centers shift focus as entertainment destinations

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Lisa Ferrazza explains how new development projects are impacting retail in South Florida.

While brick-and-mortar merchants say online shipping is chipping away at their bottom lines, shopping centers continue to be built and expanded observers say. The difference is that they now are seen as entertainment destinations.

Aventura Mall is a case in point. A 315,000-square-foot, three-story addition will contain not only stores–including a 34,000-square-foot Zara boutique and the first Topshop in Miami–but also a 7,000-square-foot VIP lounge, said Lisa Ferrazza, a retail specialist who is senior director at Franklin Street Real Estate Services. “It’s about entertainment and experiences along with shopping,” she said.

 “Probably the biggest news in the northeast corridor is SoLeMia,” she said. The mixed-use project planned by Jackie and Jeff Doffer and Richard LeFrak at Northeast 150th Street and Biscayne Boulevard will bring more than 1 million square feet of commercial space onto the market, she said. 

Uptown Biscayne, at Biscayne Boulevard and Northeast 163rd Street, “just obtained preliminary financing,” Ms. Ferrazza said. The three-tower mixed-use project will add 162,00 square feet of retail, she said, along with residential. 

The Biscayne corridor is one of the most highly trafficked, and you’ll see a lot of redevelopment there in the next few years, she predicted. West Dixie Highway, which runs parallel to Biscayne a few blocks to the west, is being expanded from two to four lanes to accommodate future growth, she said. “There will be some push-back from residents, but the redevelopment will increase home values and create a lot more jobs.” 

In the Design District, phase 3 is under construction, which will add 250,000 square feet and bring Christian Louboutin and other luxury merchants, Ms. Ferrazza said. 

Between the Design District and North Miami are about 60,000 square feet of neighborhood shopping centers, mainly along Biscayne Boulevard, she said, but strip malls are no longer attractive to investors. “The push now is erecting mixed-use projects and going vertical, whenever possible.” 

“I think that there is an incredible amount of development starting further north,” said Boris Kozolchyk, executive vice president of retail service at Colliers South Florida. He points to The Village at Gulfstream Park in Hallandale Beach, which sports a new theater, a large event space and several homes goods stores as well as restaurants. Adjacent to it is an 8-acre parcel that is ripe for mixed-use development, he said. “That whole market is really active,” he said.

Intracostal Mall, east of Biscayne Boulevard and Northeast 163rd Street, is also being redeveloped. Owned by Gil Dezer, it is “underutilized” now, with a few restaurants, a theater, a supermarket and some small retailers. “It may very well be mixed-use,” Mr. Kozolchyk said. 

He also mentioned SoLeMia, Uptown Biscayne, a proposed 340,000-square-foot addition to the Bal Harbour Shops, as well as the planned Chinatown for Northwest Seventh Avenue from Northwest 119th to 135th Streets. “Not all of these projects will happen, but there is a good chance most will,” he said. While brick-and-mortar shops “seems to be in the receding stage of life,” Mr. Kozolchyk said, “there is still demand for the right tenant, the right product and the right location.” 

“The old real estate adage that retail follows rooftops is certainly playing out in Northeast Miami-Dade neighborhoods like Aventura, Bal Harbour, Bay Harbor Islands and Sunny Isles Beach,” said John Warsing, director of sales of Verzasca Group, which is building Aurora in Sunny Isles Beach west of Collins Avenue, and Le Jardin Residences and Pearl House in Bay Harbor Islands. 

“Though the end of March, the Bay Harbor Islands/Bal Harbor/Surfside market area had nearly 40 residential projects in some sort of development,” he said via email. Le Jardin Residences and Pearl House, as well as other developments in the neighborhood, have certainly benefited from the proximity to the Bal Harbor Shops. This is also fueling the desirability of retail shops in Bay Harbor’s Kane Concourse, which has attracted high-end clothing, jewelry and beauty retailers.

“The flurry of luxury condo development along the coastline in Sunny Isles Beach helps drive retail activity on the west side of Collins Avenue. Going forward, it will be interesting to see what happens to the Epicure Market site at 17190 Collins Ave. after Epicure closed its doors on March 26. That would be a highly desirable site for a similar retailer, which would greatly benefit from the location and area demographics.”

 
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