South Florida Shopping Centers Market Report
Market Overview
Despite current economic uncertainty, South Florida continues to be a strong investor’s market. The active market of South Florida currently has 90 total properties under construction and in the past 12 months, 853 properties have sold. Broward County and Palm Beach County, both have average vacancy rates of 2.6 percent and 2.4 percent over the past 12 months, respectively.
Highlights
- Retail rents in Broward County were rising at a 10.2 percent annual rate during Q1 2023.
- There are currently 760,000 square feet underway in the Palm Beach County market.
- Vacancy rates in Port St. Lucie have been trending downward in the past four quarters and currently sit at 3.4 percent.
Vacancy | Rent | Construction
There are currently eight properties undergoing construction in Port St. Lucie, Florida. The market is forecasting a subtle rise in construction deliveries this year and predicts the sudden rise to stay steady for the upcoming years. The St. Lucie Inland submarket is performing well with five buildings under construction, accounting for a total of 18,697 square feet.
Over the past few years, Palm Beach County saw significant rent growth. The rent growth is predicted to taper off in the coming months. Under construction, Palm Beach County has a total of 48 properties, of which 86.7 percent are pre-leased. The submarket of Boynton/Lantana accounts for the most active development pipeline with 11 properties under construction.
Broward County saw extremely high market rent growth in 2022. In the upcoming quarters, the forecast looks to moderate. Broward County construction deliveries are predicted to rise in the coming quarters. Currently, there are 34 properties under construction, including the 130,000-square-foot Seneca Town Center that will be completed in January 2025.
Each county is slowly leveling out from the recent spikes during 2022 market rent growth trends.
Sales
As each respective county saw average transaction activity over the past 12 months, they also experienced the lowest cap rates in recent years.
Investors have been particularly active in Palm Beach County, making it one of the most heavily traded submarkets in the region over the past several years.
In Port St. Lucie County, 111 sales were completed over the past 12 months with an average sale price of $2,546,549 and average building square footage of 15,629. The market cap rate has dropped since last year and is currently at 6.7 percent. This is the lowest cap rate Port St. Lucie has seen in the last five years, although it is close to the U.S. average.
In the past several years, Palm Beach County has been an attractive place for investments, which has made it one of the most heavily traded submarkets in the region. Palm Beach County is also considered one of the nation’s larger submarkets, as there were 267 retail deals completed in 2022. This transaction activity is average for the market. The average cap rate is the lowest in five years at 5.6 percent.
Broward County is making strides as one of the largest retail markets in the nation with a total of 423 retail details closed in the past year. This accounts for $1.5 billion worth of retail assets sold. Market pricing in Broward County currently sits at $319 per square foot, which is above average pricing for the United States. This soaring pricing has increased by more than 10 percent since last year.
