South Florida Retail Market Report
Market Overview
Miami-Dade County’s retail market remains vibrant and resilient, demonstrating its strength despite a slight deceleration in leasing activity. The market continues to maintain historically low vacancy rates, highlighting its stability and attractiveness to retailers. The positive net absorption, propelled by robust household growth and the enduring strength of retail sales, showcases the market’s ability to adapt and thrive. Furthermore, despite an elevated construction pipeline bringing new retail space to the market, vacancies are projected to remain tight, especially in the highly sought-after Downtown Miami and Miami Beach submarkets. These areas, renowned for their lively entertainment and captivating outdoor attractions, continue to allure both residents and tourists, fostering a thriving retail environment. Although sales volume and pricing have experienced a temporary slowdown, Miami-Dade County’s retail sector exhibits resilience, appealing to a diverse and engaged consumer base.
Leasing Key Trends
Net absorption in Miami-Dade County has remained positive over the last 12 quarters, reaching over 470,000 square feet in Q2 2023, which has contributed to historic lows in vacancies of around 3.0% as of Q3 2023. Looking ahead to Q1 2024, vacancies in Miami-Dade County’s retail market are expected to witness a slight increase of just over 1.0%, reaching approximately 4.0%. The elevated supply pipeline of over two million square feet is a key factor driving the forecasted vacancy expansion. Notably, vacancy expansion is expected to be concentrated in submarkets such as Miami Lakes, Downtown Miami, Northeast Dade, Coral Gables, and South Dade, which account for over 60% of the upcoming supply. Despite having the largest supply pipeline among all Florida markets, Miami’s retail vacancy rate remains the lowest. With anticipated absorption expected to outpace inventory additions, Miami is expected to maintain tighter vacancies compared to markets like Jacksonville and Orlando over the two-year forecast period.
Miami
Miami’s retail submarket remains robust with a low vacancy rate of 2.2%, showing a slight decrease from H1 2022. Despite a negative absorption of 180 square feet, the total availability, including sublease space, remains at 2.8% of all inventory. Rents have experienced steady growth, increasing by 6.5% over the past year, averaging around $31.00 per square foot. With approximately 26,000 square feet of retail space under construction, the submarket shows a minor expansion. Over the past 12 months, there have been 107 sales in the Miami retail submarket, with an average price per square foot of $330. Annual sales volume in Miami has averaged $128 million over the past five years, making it one of the most heavily traded submarkets in the region.
Availability
Source: CoStar Group
- Inventory SF: 12.8M
- Under Construction SF: 25.6K
- Vacancy Rate: 2.2%
- Vacant SF: 280K
- Sublet SF: 4.1K
- Available SF: 354K
Rent
- Market Rent/SF: $31.47
Miami Airport
Miami Airport’s retail market remains in high demand, with a vacancy rate of 3.3%, showing a decrease of 0.5% over the past year. The absorption of 99,000 square feet and the delivery of 39,000 square feet of new retail space further contribute to the market’s vitality. Retail dominates the Miami Airport submarket, comprising 5.1 million square feet of space. Rents have shown steady growth, increasing by 5.0% over the last 12 months, with an average of around $43 per square foot. Construction activity remains robust, with approximately 160,000 square feet of retail space currently under construction, representing a 1.2% expansion of the inventory. The market has witnessed 29 sales in the past year, with an average sales price per square foot of $240. The estimated value for the Miami Airport submarket is $427 per square foot.
Availability
Source: CoStar Group
- Inventory SF: 13.7M
- Under Construction SF: 159K
- Vacancy Rate: 3.3%
- Vacant SF: 458K
- Sublet SF: 4.2K
- Available SF: 591K
Rent
- Market Rent/SF: $42.98
Coral Way
The Coral Way retail submarket is a thriving and attractive destination for businesses and investors. With a low vacancy rate of 1.1% and positive absorption of 1,800 square feet, the submarket demonstrates strong demand. Total availability, including sublease space, accounts for 9.1% of all inventory. The largest subtype, General Retail, offers two million square feet of space. Rents have increased by 2.7% to approximately $43 per square foot. Construction activity is robust, with almost 200,000 square feet under construction, representing a 7.3% expansion. The submarket has witnessed seven sales totaling $21.2 million in the past year, with a total value of approximately $96 million over the past three years. With a healthy investment market and market pricing at $470 per square foot, the Coral Way submarket presents lucrative opportunities for businesses and investors.
Availability
Source: CoStar Group
- Inventory SF: 2.7M
- Under Construction SF: 196K
- Vacancy Rate: 1.1%
- Vacant SF: 28.7K
- Sublet SF: 197K
- Available SF: 261K
Rent
- Market Rent/SF: $42.74
Coral Gables
The Coral Gables submarket demonstrates positive demand with a vacancy rate of 3.3%, showing a slight increase of 0.9% over the past year. The absorption of 600,000 square feet and the delivery of 660,000 square feet of new space highlights strong market activity. General Retail dominates the submarket with 3.2 million square feet of space. Rents have increased by 1.5% to $49.93 per square foot. Construction activity is minimal, with only 6,300 square feet underway. In the past year, 10 sales have taken place at an average of $630 per square foot, with a submarket value estimated at $506 per square foot. Annual sales volume has averaged $59.6 million over the past five years, and market pricing has increased to $506 per square foot.
Availability
Source: CoStar Group
- Inventory SF: 4.9M
- Under Construction SF: 6.3K
- Vacancy Rate: 3.3%
- Vacant SF: 160K
- Sublet SF: 1.7K
- Available SF: 181K
Rent
- Market Rent/SF: $49.93
West Miami
The West Miami retail submarket showcases positive trends and strong investor interest. With a vacancy rate of 1.1%, showing a decrease of 0.4% over the past 12 months, the submarket reflects a high level of occupancy. The market saw a 12-month absorption of 29,400 square and deliveries of 400 square feet. Neighborhood Centers is the largest subtype in the West Miami submarket, offering 3.4 million square feet of space. Rents in the submarket have experienced a significant increase of 7.3% to $41.45 per square foot. In terms of sales, there have been 13 transactions in the past year, averaging $290 per square foot, with an estimated submarket value of $416 per square foot. The West Miami submarket attracts consistent buyer interest, with annual sales volume averaging $50.9 million over the past five years.
Availability
Source: CoStar Group
- Inventory SF: 7.3M
- Under Construction SF: 0
- Vacancy Rate: 1.1%
- Vacant SF: 82.9K
- Sublet SF: 0
- Available SF: 151K
Rent
- Market Rent/SF: $41.45
Coconut Grove
The Coconut Grove submarket has a low vacancy rate of 3.5% and an impressive absorption of 22,000 square feet. The recent addition of 6,000 square feet of new retail space highlights positive market growth. General Retail dominates the submarket, offering an expansive 920,000 square feet of space. Rents have experienced a steady increase of 3.6%, reaching $59.63 per square foot, with a cumulative three-year growth of 12.2%. While construction activity remains modest, with 7,000 square feet currently underway, Coconut Grove’s investment market has remained a popular region for investment activity. Despite a slight slowdown in sales activity, with only three transactions in the past year, the market’s stability is evident with a steady market cap rate of 5.2%. Market pricing stands strong at $580 per square foot, surpassing the previous year and exceeding the metro average.
Availability
Source: CoStar Group
- Inventory SF: 1.8M
- Under Construction SF: 7K
- Vacancy Rate: 3.5%
- Vacant SF: 62.4K
- Sublet SF: 0
- Available SF: 53.6K
Rent
- Market Rent/SF: $59.63
Kendall
The vacancy rate in the Kendall submarket is 3.3%, showing a decrease of 0.2% over the past 12 months. During this period, 85,000 square feet has been absorbed, indicating positive demand. The submarket has seen the delivery of 46,000 square feet of new retail space. Within the Kendall submarket, Neighborhood Centers are the largest subtype, comprising 10.3 million square feet of retail space. Rents have risen by 4.6% in the past year to $45.22 per square foot. Construction activity is underway with 556 square feet currently being built. Sales activity remains active, with 41 transactions in the past year at an average of $370 per square foot. Kendall has attracted significant investment, recording a 12-month sales volume of $227 million and market pricing is estimated at $399 per square foot.
Availability
Source: CoStar Group
- Inventory SF: 22.6M
- Under Construction SF: 556
- Vacancy Rate: 3.3%
- Vacant SF: 751K
- Sublet SF: 168K
- Available SF: 767K
Rent
- Market Rent/SF: $45.22
South Dade
With a vacancy rate of 1.5%, experiencing a decrease of 0.2% over the past year, South Dade displays strong occupancy levels. The absorption of 200,000 square feet reflects high demand, complemented by the delivery of 180,000 square feet of new retail space. General Retail takes the lead as the largest subtype within the South Dade submarket, offering a substantial 6.5 million square feet of retail space. Rents in the submarket have shown a significant increase of 7.6% to $33.87 per square foot, with a cumulative three-year growth of 23.9%. Construction activity is currently underway, with 313,000 square feet of retail space being built, representing a 2.3% expansion of inventory. Sales activity remains active, with 35 transactions in the past year averaging $250 per square foot. South Dade has recorded a 12-month sales volume of $109M, surpassing the historical average of $88.9M. Market pricing is estimated at $338 per square foot.
Availability
Source: CoStar Group
- Inventory SF: 13.5M
- Under Construction SF: 313K
- Vacancy Rate: 1.5%
- Vacant SF: 201K
- Sublet SF: 4.7K
- Available SF: 265K
Rent
- Market Rent/SF: $33.87
Little Havana
Little Havana’s retail market offers an attractive proposition for businesses with its average asking rate of $34.73 per square foot, which is almost on
par with the overall market’s average rate of $35 per square foot. According to Crexi Intelligence, the ratio of occupied retail properties to vacant ones stands at an impressive 11 to one, indicating a high level of occupancy in the area. Retail leasing properties in Little Havana tend to be more spacious, averaging 3,321 square feet compared to the market’s average of 1,957 square feet. With a labor force consisting of approximately 12.7 thousand employees, accounting for around 23% of the submarket’s population, Little Havana provides a substantial workforce for businesses.
Availability
Source: CoStar Group
- Inventory SF: 294K
- Under Construction SF: 0
- Vacancy Rate: 20.5%
- Vacant SF: 60.4K
- Sublet SF: 0
- Available SF: 63.9K
Rent
- Market Rent/SF: $37.02
South Florida Recent Retail Construction
Miami-Dade County’s retail construction pipeline remains active, with approximately 2.6 million square feet of new retail space currently underway. Around 1.2 million square feet of retail space has been delivered in the last 12 months. Retail development has expanded towards Northeast Dade and South Dade, where combined retail inventory has grown by over 1.7 million square feet in the past five years. The Coral Gables and Miami submarkets have also seen significant development, with combined inventory growth of over 1.1 million square feet. Notably, large-scale retail development has been limited in recent years, with only a few projects larger than 100,000 square feet delivered Instead, most of the projects underway consist of properties smaller than 75,000 square feet.
