Torose Equities Taking Advantage of 'Wealth Migration' in Miami Retail

The retail segment of CRE is thriving thanks to consumer demand – and Torose Equities is seizing the opportunity in Miami.

Particularly, Scott Sherman, founder and principal of the real estate investment firm told GlobeSt that demand has been “strong” in the past year or two.

“It’s become a more favorable asset class,” he said.

“You’re seeing a lot of capital still actively pursuing, retail properties throughout the country. So it’s definitely, I think, stronger than some other asset types we’re looking at national level.”

In March, vacancies in the retail sector were at an all-time low, according to a national report from Marcus & Millichap. Plus, supermarkets, restaurants, discount stores, and fitness centers all saw significant gains in traffic in the first five months of 2024. The spike ranged from 5.7 percent to 8.9 percent, with discount retailers seeing the largest activity. Consumer demand in the industry is generally high, currently.

When it comes to geographic location, Torose has its sights set mainly on Miami, Florida. For one, that’s where its headquarters are located, and it notices a big trend that involves Americans migrating from the Northeast into Sunbelt markets.

“There’s a lot of wealth migration happening down here,” Sherman said.

“And obviously, the more income and disposable income people have, living in the state and Miami, I think it’s going to translate into more sales and demand for retail. So we’re seeing that firsthand, it’s been encouraging.”

Plus, it’s important to keep in mind that younger Americans are leading the charge in moving to the suburbs in the South, according to a research report from StorageCafe. Texas and Florida have been the most prevalent states they are moving to.

Most recently, Torose pounced on the opportunity to purchase retail space at 910 Lincoln Road in Miami Beach. The 8,700-square-foot district, which is fully occupied by clothing brand AllSaints, contains dining, entertainment, and shopping venues. Some retailers that surround the single-tenant property include Nike, Apple, Sephora, Victoria’s Secret, and Urban Outfitters.

According to Torose, Miami Beach’s retail submarket on average hosts an occupancy rate of 95 percent, currently. Plus, the area has experienced rental growth of 31 percent since 2013.

Along with South Beach, Torose is focused on other parts of Florida including Palm Beach, and Fort Lauderdale.

“We’re also very active on the west coast [of Florida] from Tampa down to Naples,” Sherman added.

While the first half of the year has been strong for the retail sector, Torose’s founder admitted that Americans might be starting to slow down their spending on retail.

“I think we hit a saturation point on restaurant, the food and beverage down here (Miami), and you’re starting to see some restaurants closing,” said Sherman.

“So you’re gonna see a little bit turnover and shake up over the over the coming year. Just a natural kind of evolution.”

But he did add that there’s still plenty of retail demand in South Beach and isn’t alarmed. While the short-term can bring some volatility, Sherman is keeping a bullish outlook over the longer run.

“We’re kind of in a rising tide environment over here, so there might be some bumps along the way,” he noted.

He also listed the possibility of a recession, which is feared by some experts, considering employment went up nationally for the third consecutive month in June.

“But I think long-term we’re going to be looking great,” a positive Sherman concluded.