Wal-Mart continues two-year quest for downtown location
By Yudislaidy Fernandez
Mega retailer Wal-Mart hasn't given up on finding a downtown Miami home, an on-going search for two years, retail brokers say.
But finding urban core space hasn't been easy, as the credit crisis that fueled the recession has slowed several planned retail projects.
Wal-Mart, the world's largest retailer, in the past two-plus years has courted such planned developments as City Square at 431-1451 N Bayshore Drive and 425 NE 13th St., Bayview Market at Northeast Second Avenue and 17th Street, and the Omni mall complex on Biscayne Boulevard, which planned 270,000 square feet of retail.
None of these long-planned projects has a shovel on the ground, although that could change as the economy continues to improve and more retailers retool their expansion plans.
Wal-Mart has said it's interested because Miami's urban core represents an underserved area with significant growth taking place and few low-cost retail options. The company didn't reply to requests for information and interviews.
Boris Kozolchyk, Grubb & Ellis vice president, says downtown is "underserved and it is difficult to find good retail positioning in terms of access."
The area's need for basic services is being recognized, he said, citing supermarket giant Publix seeking permits to open a 48,000-square-foot store on Biscayne Boulevard and Wal-Mart's continued search.
"The strong retailers are the ones we are mentioning. Essentially, they have a wider appeal, they are more likely to attract customers even at times like now," he said. "If they are strong retailers, now is an opportune time because there is available real estate that has been vacated by other tenants and is not as expensive because there are opportunities that otherwise wouldn't exist."
A Wal-Mart bid to move into the downtown corridor in the past drew concern from residents and Miami commissioners. They've said they fear the traffic congestion the mega-retailer could bring to an already-crammed downtown.
But it looks like the big-box chain hasn't given up. And some brokers say Wal-Mart's entrance to the urban core could do for downtown what Target has done for The Shops at Midtown Miami.
This shopping complex in nearby Wynwood lost two anchors, Circuit City and Linens 'N Things, which filed for bankruptcy in 2008. But it has remained strong, bringing in new restaurants and stores that cater to the immediate area and surrounding neighborhoods. Among its retail tenants are Loehmann's, Target, West Elm, Ross and Marshalls.
A Wal-Mart downtown would represent "an amenity for the community. It adds value, it adds jobs," said Tony Cho, owner and founder of Metro 1 Properties. "I am sure it will be a success like Target has been a success in Midtown. If you can have them centrally located, it's an amenity for the community."
With various site options and shifting prices, it's not abnormal that Wal-Mart has been searching for a location for more than two years, said Mr. Cho, who handles retail leasing downtown.
With leasing rates decreasing in the past several years, he added that the national retailer could be waiting for the best opportunity.
"For the Lowes, and Wal-Marts of the world, before it was too expensive to come into these urban markets but now it is making economic sense," Mr. Cho explained. "These are not luxury retailers, these are not fashion tenants, these are retailers and common goods that typically need to have affordable land and lots of it."
Also, finding retail space for a store that typically takes about 100,000-plus square feet and needs ample parking is challenging, said Monette Klein O'Grady, partner and sales associate at brokerage Prime Sites.
"I think as well you have to look at the retail mix in downtown Miami, have to think of how neighborhoods evolve and what will be appropriate for consumer needs in the area," she said. Shops at "Midtown is an example of doing that."
Downtown's new condo residents, coupled with a large workforce, need these types of basic services, Mr. Cho said, adding that the 2010 Census "should help these retailers make decisions on potential locations because they are very data driven."
Wal-Mart Stores has a large Florida presence with 170 supercenters and 34 discount stores, the company Web site shows. And it remained strong through the downturn, reporting $405 billion in worldwide sales for the year ending Jan. 31.
Mr. Kozolchyk of Grubb & Ellis said Wal-Mart's entrance to downtown would confirm the area's "coming of age as a residential destination and retail location. I think it will be good for additional retailers to come into the market feeling like there will be a nucleus."
Ms. Klein O'Grady envisions downtown Miami's growth similar to that of New York City, with distinct neighborhoods with their own unique tenant mix. She says she sees Miami as the "Little Apple."
"I hope as we see the future of the urban core develop with museums and retail, we'll start to see how our different neighborhoods develop and attract different retailer mix, each one will take on their own characterů," she said.
"They'll each have their own pockets to service the demographic, not only the one that lives in the area but the one it draws to it through the business and tourism sectors and the Miami [-Dade] population that will come in and out of Miami."