Think of it this way: Once a submarket reaches its peak, there's no room for growth. But a submarket that's poised to climb up to the peak offers opportunity for growth.

That's why it they are catching the eye of investors who are opting for second-grade product in markets poised for growth—but that aren't yet booming.

"Now, more and more clients we talk to are saying, 'Look, don't show me Class A stuff. Show me Class B-, Class C value-add, garden-style buildings in these outside markets. I want to buy that, renovate it, increase the rents.' " said Mitash Kripalani, director of investment sales at Colliers International South Florida in Miami. " That's the trend we are seeing in multifamily housing."

In Miami-Dade County, two historically popular areas that fell on hard times are making a comeback as retail destinations, with one also adding more office space. In multifamily, while urban cores like downtown Miami and Brickell are experiencing population growth, the value-add opportunities are in western Miami-Dade and Broward county areas.

Making a Comeback

Miami-Dade in a way is similar to New York, said Michael Comras, president and CEO at The Comras Co. in Miami Beach.

"It's a city of villages," he said.

Two "villages" poised for a comeback are Coconut Grove and Miami Beach's Lincoln Road.

Historically, both were a major draw of foot traffic and patrons but then faded, losing out on newer, trendier competitors.

"For many years the Grove was overlooked while other areas in Miami gained a lot of attention. Wynwood gained a lot of attention; Design District, Brickell City Centre. But the original village of Miami is Coconut Grove," Comras said.

About 80,000 square feet of retail was under construction in the Grove in this year's third quarter, according to Colliers.

CocoWalk, once one of Miami's top shopping and dining destinations, is being reinvented with homegrown, edgy retailers and an office building. The former 198,000-square-foot all-retail project will scale down its retail to 150,000 square feet but add the five-story One Cocowalk office building.

In its previous heyday, it was an evening and weekend destination, but now it will draw local crowds throughout the day, said Comras, whose Comras Co. is part of the development partnership working on CocoWalk.

"It's really made Coconut Grove as a daytime population. So people rather than going to Brickell and spending that extra time in their car, they are choosing to spend their time with their families and really congregate into that area," he said.

The neighborhood also is becoming a good office investment market. Little new product has been delivered for years, prompting a pent-up demand. The vacancy rate was 0.8%, the county's lowest, according to JLL data.

Developers are responding, as nearly 212,000 square feet of office space is in the pipeline and another 44,000 square feet was completed in the third quarter. Terra and project partner Mayfair Advisors redeveloped an old garage at 3310 Mary St. into a 77,840-square-foot office building with ground-floor retail and 340-space garage.

"The secondary non-Central Business District markets are really starting to come into their own and starting to evolve and transition," Hurwitz said.

Lincoln Road also is making a comeback as a retail destination, in part betting on the experiential shopping concept. E-commerce growth has pushed brick-and-mortar stores to reinvent themselves by offering more than a place to shop, but a place to experience.

"Retail is really driven by socialization," Comras said.

At Lincoln Road's Nike store, consumers can test out shoes at a second-floor basketball court with an adjustable hoop and at an indoor soccer field with synthetic turf.

This year's new retailers include a store by Brazilian soccer legend Pelé selling gear from international teams. Also, 13 sculptures by Colombian artist Botero were exhibited last month in time for Art Basel Miami Beach.

Comras said retailers on Lincoln are asking for smaller footprints, but overall the pedestrian road is making a comeback.

"When you have public spaces that are great gathering spaces, as long as they are merchandised properly, they will continue to attract investors," he said.

The Miami Beach City Commission last summer also approved a $67 million Lincoln Road revitalization, the first in two decades.

'Sweetheart Product'

The strong South Florida multifamily market is fueled by population growth, and the high cost of buying a home driving residents to rentals.

"Multifamily is a sweetheart product. Everybody likes multifamily. Miami is absorbing a lot of the units being delivered," said Kripalani of Colliers.

Downtown Miami and Brickell have experienced population growth in recent years as more residents seek out the live-work-play lifestyle where they can live in a high-rise apartment building and walk to work and entertainment.

About 5,000 apartment units were delivered this year from downtown north to Wynwood, Edgewater and up to Midtown, Kripalani said.

But these are already booming markets with increasing daytime foot traffic, meaning value-add opportunities lie west of there.

If history is any indicator, then investors surely are taking note of suburban markets. This year the biggest multifamily deal was the $322 million sale of The Avant at Pembroke Pines, a big complex with 1,520 units across 85 acres in Broward's Pembroke Pines. NexPoint Residential Trust Inc., a publicly traded real estate investment trust based in Dallas, bought it from National Property REIT Corp.

In Miami-Dade, unlikely areas are boasting high rental growth that's outpacing prime markets. Miami Gardens saw a 5.2% increase in rents this year compared with last year, and Homestead and other parts of South Miami-Dade saw a 6.6% rent increase, according to Colliers data. That's more than the 2% annual rent growth downtown and South Beach experienced.

Yet, Miami Gardens and Homestead remain cheaper, as rents there are about $1,330 and $1,220 a month respectively, less than the $2,090 in downtown and South Beach, according to Colliers.

"I think these markets have become very favorable. There's better rent growth in those markets right now than there is in downtown," said Kripalani.

There's been pent-up demand for apartments there, and also traditionally there's been a lower income tenant base, opening the door to rent growth and making them fitting value-add opportunities for investors.

"I like looking at these outside markets, outside of the urban core and downtown," Kripalani added. "That's where the better returns are. That's where the long-term buyers are thinking, 'I will be better poised for growth in those markets.'"