Fort Lauderdale, FL Retail Market Report
Market Overview
Fort Lauderdale’s retail market reflects a complex landscape influenced by household dynamics, tourism, and construction activity. Leasing activity has slowed down, with a decrease in the amount of space leased compared to previous years. However, positive net absorption has contributed to a decline in vacancies, which are currently lower than the five-year average. Fort Lauderdale has seen robust household growth and rising incomes, leading to increased buying power for residents. The recovery in international in-migration and travel has further boosted retail sales, benefiting both local residents and the tourism sector. Despite significant construction in previous years, the current construction pipeline is limited, indicating a tight market with few new additions. While sales volume has decreased, annual pricing gains have remained strong. However, rising interest rates and economic factors may impact transaction volume and price growth in the near future.
Highlights
- Fort Lauderdale (FLL) has the third highest retail rents in Florida, trailing behind Miami and Palm Beach.
- The 12-month sales volume is $1.1 billion, exceeding the historical average.
- Net absorption has remained positive for the last nine quarters.
- Retail development has primarily expanded in the Southwest Broward, Fort Lauderdale, and Plantation submarkets since 2020.
Rents | Vacancy | Construction
As of Q1 2023, Fort Lauderdale has seen retail rents of $33 per square foot, among the highest in the Florida market. The rent premium in Fort Lauderdale compared to the U.S. average asking rent has increased from around 22% higher in 2020 to over 38% higher currently. Strip centers, general retail, and other retail subtypes have been driving the rent growth outperformance, with annual rent gains exceeding 24% since 2020. Additionally, vacancies in Fort Lauderdale stand at 3.3% as of Q2 2023 and are expected to remain below 4.0% in the near term due to limited supply additions and shrinking construction starts. Furthermore, Fort Lauderdale, despite having the sixth largest supply pipeline in Florida, boasts the third lowest retail vacancy rate among all the markets in the state, even with over 50 million square feet of retail inventory. In terms of development, there are approximately 500,000 square feet of new retail space under construction, and over the past year, around 230,000 square feet have been delivered.
All submarkets in Fort Lauderdale have achieved year-over-year rent growth of over 10% in Q1 2023.
Sales
Fort Lauderdale, By the Numbers in the Past 12 Months
- Square Feet Delivered: 233K
- Properties Under Construction: 26
- Rent Growth: 9.6%
- Sales Volume: $1.1B
- Average Vacancy Rate: 3.3%
The 12-month sales volume for Fort Lauderdale’s retail market is $1.1 billion, surpassing the historical average of $842 million. However, retail investment investment in the Fort Lauderdale market has slowed, with only $290 million recorded so far in the current year, compared to over $735 million in H1 2022. Price growth, which had experienced an appreciation of over 28% since 2019, started to slow down in Q1 2023, primarily due to economic headwinds impacting investment activity. Furthermore, the largest single property trade in the past year involved the Monarch Town Center, a 150,000-square-foot property in Southwest Broward, which was sold for over $61 million.
