Retail Pulls in Strong Numbers in South Florida

FORT LAUDERDALE, FL-Two newly released research reports show the Broward County retail market to be going strong, contributing to a healthy South Florida retail sector. The county’s main city, Fort Lauderdale, holds the No. 4 spot in Marcus & Millichap Real Estate Investment Brokerage Co.’s annual National Retail Index, which ranks 40 US retail markets. The city moved up one slot on the index this year. In fact, the city beat out the key cities in the other two South Florida markets on the index. West Palm Beach in Palm Beach County rose one slot to No. 7, while Miami, in Miami-Dade County, fell four positions to No. 19.Overall, retail seems to be strong in South Florida, according to Marcus & Millichap, which forecasts positive investment in the area. Furthermore, the report says the overall vacancy rate should drop in all three of these South Florida markets. Fort Lauderdale’s rate is predicted to fall 40 basis points to 8.5%; West Palm Beach’s rate should fall 20 basis points to 6.3% this year; and the rate in Miami is expected to drop 30 basis points to 6.7%.”South Florida retail will continue to be the most stable commercial real estate sector with investor demand remaining strong and grocery-anchored centers serving as the darling of retail investors,” Gene A. Berman, vice president and regional manager of Marcus & Millichap’s Fort Lauderdale office, says in a statement. “A regional economy posting job growth and an increase in retail sales will aid the local retail leasing and investment markets.”According to another company, Terranova Corp. in Miami, occupancy and rental rates in Broward County shopping centers have gotten better since 2000. Although new space has been added to the market, the overall vacancy rate of Broward shopping centers has decreased to 7.9% from 9.7% in late 2000. In addition, the average asking net rental rate increased 26.6% from $14.83 per sf in 2000 to $18.78. These figures were obtained from a survey of 251 centers of at least 50,000 sf, excluding enclosed regional shopping malls. Since 2000, the area has seen 23 new shopping centers with approximately 1.5 million sf of retail space combined.The study states that although big retailers such as K-Mart and Service Merchandise have downsized in the market or disappeared altogether, others have grown. Among them are a Home Goods that opened in a former Service Merchandise location and a Sedano’s Supermarket that is replacing Albertson’s, both in Pembroke Pines.”In addition, a new cadre of in-line tenants and fast food restaurants are proliferating throughout the county, such as EB Games, GameStop and Quizno’s Subs,” according to the Terranova report.