While many retail shops in Miami-Dade and Broward sat empty during the first months of the pandemic, a few neighborhoods actually experienced a bump in leasing.
Downtown Miami, Coral Gables and Medley/Hialeah defied the nationwide retail spiral, increasing total retail inventory by more than 10,000 square feet each, according to Colliers International’s second-quarter retail report.
“The positive net absorption in these neighborhoods were hangover deals done during the fourth and first quarters,” said industry watcher Beth Azor, investor and broker at the Weston-based Azor Advisory Services.
Dave Preston, executive managing director for retail services for Colliers International, agreed, noting that retail transactions take six to eight months to process.
Another factor, said Azor: Paycheck Protection Program funds, which allowed many tenants to hold on during the second quarter.
But those positives will likely be offset in the third and fourth quarters. Azor said she expects those market reports will show double-digit vacancy rates, at least of 10%, and a minimum of 10% drop in asking rents. Average asking rates have already inched downward, according to the Colliers report.
South Florida also will feel the impact of the national bankruptcies and store closings announced in the second quarters — J. Crew, CMX Cinemas and Neiman Marcus, just to name a few. Miami-Dade Mayor Carlos Gimenez’s order on Monday to end dine-in services and close some other businesses in the county “will be the nail in the coffin for many businesses; this will increase the vacancy numbers,” Azor said.
Total second-quarter vacancy grew from 4.3% to 4.5%. The completion of new construction injected 10,195 square feet into the market, bringing the total to 101.3 million square feet — 230,698 square feet more than the market absorbed.
But some neighborhoods were spared. Downtown Miami increased leased space by 28,651 square feet; Coral Gables grew by 17,428 square feet, and Medley/Hialeah grew by 24,397 square feet.
“The positive absorption in Downtown Miami stands out. The new development, including Miami Worldcenter and Moishe Mana’s Flagler Village, shows growth in the market,” Preston said.
Newcomers to Downtown Miami leased 2,000 square feet, including ArTi Entertainment, which took 2,200 square feet. “That shows entrepreneurship is alive during the pandemic,” Azor said.
The average direct asking rate decreased from $37.95 to $35.98 per square foot.
Source: Miami Herald