Retail Soars Malls Add Slots For Stores
Written by Marilyn Bowden on October 25, 2012
By Marilyn Bowden
Miami-Dade retail is back to performance levels not seen since 2006-’07, a trend that is driving expansions at some major malls.
Dadeland Mall, 7535 N Kendall Drive, is at full occupancy, said General Manager Maria Prado, and is in the process of leasing 102,000 square feet in a new wing scheduled to open next spring.
"Basically, we knocked a building down next to Macy’s," she said, "and we’re building a new product of two stories that will have space for 18-20 new retailers, six of which are restaurants."
She said the rapid growth of Kendall, with its mix of new apartment projects, hotels and medical facilities, puts the mall in the middle of a high-demand area, attracting both locals and tourists.
"We’re in a very advantageous situation," Ms. Prado said, "because Dadeland has become such an icon of the community as a destination for buyers. Even when the market goes through downs, we have done very well.
"If we had another new floor, we could probably lease it."
Dadeland was selected as one of only two South Florida locations, Ms. Prado said, for a Microsoft pop-up kiosk, a much-touted new concept opening in malls around the country this Friday.
Bal Harbour Shops, 9700 Collins Ave., is also planning an expansion, said Operating Partner Matthew Whitman Lazenby, a grandson of the mall’s original developer.
Earlier this year, an agreement was reached with neighboring Church by the Sea that gave Bal Harbour Shops the right to tear down and develop the site at 501 96th St. on which the church has stood for nearly 70 years. In exchange, Bal Harbour Shops will build a 50,000-square-foot, eco-friendly church on land it owns at Bal Bay and Park drives, on the northwest corner of the shopping center’s property.
"My family and I have been in conversations with our neighbors, the Church by the Sea, for the better part of half a century," Mr. Lazenby said. "We are just delighted to have found a solution that allows the church to advance its mission while affording us the opportunity to finally move forward with our long-awaited expansion."
He said the new site will support a 230,000-square-foot addition to the existing 450,000-square-foot retail property. About half the space will allow existing stores to expand, he said; the rest will accommodate new brands.
Demand for space in the luxury mall has always exceeded supply, Mr. Lazenby said, noting that sales at Bal Harbour have increased every year since its opening in 1965 with just two exceptions: in 2001, in the wake of the 9/11 attacks, and in 2009, following the nationwide economic crisis.
The reason for that demand is not hard to find: according to the International Council of Shopping Center’s "Shopping Centers Today," Bal Harbour Shops ranks No. 1 worldwide in productivity. Its record average annual $2,555 per square foot in sales is nearly seven times the industry average of $451 a square foot.
In general, Miami-Dade retail is flourishing. Cushman & Wakefield charted the overall retail vacancy rate at midyear at about 4%.
"Miami-Dade County is really very highly occupied," said Stephen Bittel, chairman and founder of Terranova, "with rental rates on the high street in excess of where they were in late 2006-’07.
"Transaction velocity is high, with a lot of national chains here signing leases. Tenant sales performance is also back up, and strong sales translate immediately into high rates. We have had a tremendous recovery, far faster than most imagined."
While the two highest-growth areas have been Lincoln Road and Brickell, he said, "enclosed malls are also doing very well, and open-air centers have filled up at really great rental rates."
As a result, Mr. Bittel said, a number of sales of retail centers is likely.
"Valuations are at record highs, interest rates are at record lows. A lot of debt capital is available in the 3.5%-4% range, and many people who rode through the cycle are ready to monetize their position."To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.