Retail’s rent markup While Miami’s brick-and-mortar sector may be outperforming those around the U.S., word on the street is that landlords have outsized expectations
The first retail portion of the $350 million mixed-use development at the former Plantation Mall is nearly 65 percent leased, Encore Capital Management says.
As South Florida’s retail real estate sector continues to show strength — an anomaly as the rest of the country sees vacancy rates creep ever higher — some worry that landlords in the tri-county region’s hottest neighborhoods and high streets are just a bit too optimistic about the market.
While rents continued to rise in the third quarter, a recent JLL report said a decline in deals suggests rents in the Miami and Fort Lauderdale markets have peaked and will soon tumble. “Transaction volume has dried up and occupancy rates are beginning to retreat,” the report said. A slew of new retail-focused, mixed-use developments — as well as industrial warehouses being converted into retail — in neighborhoods like Wynwood and Allapattah have been slow in signing tenants, a JLL company spokesperson said in a statement. “The occupancy levels cited in the report are reflective of the vacancy in newer retail developments, so transactions have not kept up with added supply,” the statement read.
But continued low vacancy rates this year have emboldened landlords, and some of them are looking for rents that exceed current market norms.
“In segments where you have seen dramatic investment activity, like Lincoln Road, the Design District and Wynwood, there is a little bit of a disconnect,” said Ken Krasnow, executive managing director for Colliers International’s South Florida 上海千花网