JLL: Miami Retailers Have Drawn a Line in the Sand

South Florida retail

MIAMI—Despite hurricane watches this week, there are no clouds forecasted for the Sunshine State’s 14 retail cities. That’s according to a JLL report, which reveals most Florida markets are exceeding 90% retail occupancy and rising rents. In the first half of 2016, Florida’s retail sector posted massive leasing momentum and there is no immediate end in sight. Launched at ICSC’s Florida Deal Making Conference, the JLL report reveals the top 14 Florida retail cities are rising or peaking for the first time since 2008. In the last three years, retailers have leased 10.8 million square feet of space in the state. South Florida is still strong but the pace has slowed, according to JLL. Palm Beach County saw strong rent and occupancy increases, as it has lagged behind the rest of the region and still have some room to run. “Miami is one of the most sought after retail destinations in the world for brands and visitors alike,” JLL vice president Justin Greider tells GlobeSt.com. “While rental rates may be leveling off, this should not be misinterpreted as a weakening market. Miami-Dade continues to command the highest asking rates for retail space in the state of Florida.” Miami is still the strongest market in the Southeast, but retailers have drawn the line in the sand for how much they will stretch to be in the market. Broward-Fort Lauderdale has seen retail rent growth of the past four years leveling off, but a strong development pipeline will be adding some good quality product to the mix. Further west, Fort Myers still has some volatility in retail rents. But tenants have leased nearly 1 million square feet in the past four years. Naples’ retail rents are at all-time highs, and exceed all markets in the state outside of South Florida. North Florida is poised to see moderate growth during the next year, according to JLL, with both Jacksonville and the Panhandle seeing consistent growth during the past 18 months in retail rent and occupancy. Tallahassee is topping out with occupancy approaching 94% but there is new product that will absorb during the next 12 months at rates higher than the market average. “Florida, and in particular South Florida, remains crucial to both retailer’s and landlord’s portfolios but the tightening market has created oversized demand for new inventory, and it’s being delivered along with an increase in rents,” says Andy Carlson , a vice president of Retail at JLL. “South Florida has 3.2 million square feet of new construction in the pipeline, just behind Houston and Dallas nationally. We expect the outlook for Florida to be bright over the next 18 months even with select markets like Tallahassee and Miami peaking with rent decline. There is still an opportunity for overall growth in Florida.”