South Florida Retail Rents Climbed In Third Quarter
From left: Mary Brickell Village in Brickell (left), Palms Plaza in Boca Raton (top), and The Shoppes at Pembroke Gardens in Pembroke Pines (right) (Getty, Mary Brickell Village, Google Maps)
South Florida retail landlords joined their industrial and office counterparts in jacking up asking rents during the third quarter. In Miami-Dade, Broward and Palm Beach counties, rents rose by $3 or more per square foot, year-over-year, according to a recently released report.
Sustained tenant demand kept vacancies low across the tri-county region. And investors seeking inflation resistant real estate assets flocked to outdoor retail plazas and shopping centers in the third quarter, Colliers found. Retail sites anchored by grocery stores are getting the most attention from buyers.
Miami-Dade County
The asking rent in Miami-Dade County jumped by 13 percent, year-over-year. Landlords asked for an average of $43 a square foot during the third quarter compared to $38.85 a square foot during the same period of last year, the report shows.
The vacancy rate remained relatively stable at 3.5 percent in the third quarter, compared to 3.8 percent during the same period of last year.
In the third quarter, landlords leased 422,000 square feet of retail space, an indicator that Miami-Dade’s retail market should remain stable through the end of the year, the report states.
Commercial real estate investors are on the hunt for shopping centers and outdoor retail plazas, Colliers found. In Miami-Dade, RPT Realty’s $216 million acquisition of Mary Brickell Village in Miami’s Brickell neighborhood represented the largest deal of the third quarter, the report states. RPT Realty paid $855 per square foot.
Broward County
Retail landlords in Broward County raised the average asking rent to $26.56 a square foot in the third quarter, compared to $23.09 a square foot for the same period of last year. The vacancy rate dipped to 4.3 percent in the third quarter, compared to 5 percent during the same period of last year.
Broward retail finished the third quarter on a positive trajectory, with the market leasing 523,000 square feet of space, Colliers found. Tenant demand is outpacing supply, and 250,000 square feet of new retail space will be absorbed quickly, the report states.
Federal Realty Investment Group’s $180.5 million purchase of The Shoppes at Pembroke Gardens, an open-air mall in Pembroke Pines, represented the largest retail transaction in Broward during the third quarter, the report states. The deal breaks down to $462 a square foot.
Palm Beach County
In Palm Beach County, the average asking rent climbed to $28.02 a square foot, compared to $24.94 a square foot during the same period of last year. The vacancy rate dropped considerably to 3.6 percent in the third quarter, compared to 4.9 percent during the same period last year.
Both are indicators that the Palm Beach retail market is thriving, Colliers found. Landlords leased 412,000 square feet in the third quarter, and another 339,000 square feet under construction will be quickly absorbed by the end of the year, the report states.
The largest retail deal in Palm Beach County during the third quarter was Kite Realty Trust’s acquisition of Palms Plaza, an outdoor shopping center in Boca Raton, for $37.8 million, or $715 a square foot.
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