Strong consumer spending and supply shortages are expected to continue.
Trends in South Florida’s retail market indicate that rents will rise as available space becomes harder to find.
A strong tourism industry, including the return of international tourists, and consumer spending above the national average are driving the market, with demand for space outstripping supply.
Asking rental prices for retail space in South Florida are up nearly 5% so far this year, while the vacancy rate is 2.8%, according to CoStar data. Meanwhile, the retail shortage continues to worsen, with nearly 95% of new construction in the region being pre-leased before delivery.
The limited supply of premium retail space with high visibility, favorable co-tenancies and ample parking has led to declining rental volumes and an increasing preference for tenant ownership, the 2010 report said. RE Business.
The gap between supply and demand, along with the expectation that asking prices will continue to rise in the second half of the year, is driving a rise in owner-occupied retail space in South Florida as more financially able occupiers explore ownership options, according to the report.
The retail pipeline under construction in South Florida in the first quarter of 2024 totaled 2.3 million square feet, down from 3.6 million square feet in the same period last year. According to the Lee & Associates report, net absorption has exceeded supply for the past three years.
Miami-Dade County’s vacancy rate fell 30 basis points in the first quarter to a 10-year low of 2.7 percent.
Despite the addition of more than 396,000 square feet of new retail space, net absorption in the first quarter exceeded new supply, with nearly 663,000 square feet withdrawn from the Miami-Dade market by the end of the quarter, according to a Colliers market report.
According to data from Visit Florida, Florida is expected to maintain its position as the top U.S. tourist destination in 2023 with 123 million visitors and attract 12 million international visitors.
Earlier this month, Florida announced it was seeing record tourism numbers in the first quarter of 2024, with international visitor numbers approaching pre-pandemic levels. CBS News report.
According to the report, an estimated 37 million out-of-state visitors came to Florida in the first quarter, the most ever for a quarter. More than 2 million international travelers visited Florida in the first quarter, and nearly 1.3 million visitors came from Canada. A total of 2.28 million international visitors came to Florida in the first quarter of 2019.
