For investors looking to buy retail assets in the next three years, Miami and Fort Lauderdale are the No. 1 and 2 markets, respectively, to consider in the U.S., according to a long-term retail market outlook report by online real estate marketplace, Ten-X.
The “Retail Market Outlook” report places the two cities in the top spots largely due to strong employment growth in recent years.
In Miami, local employment is at a peak, according to the report, particularly in the hospitality sector. According to the Greater Miami Convention & Visitors Bureau, hospitality and leisure employment rose by nearly 5 percent in 2015 to 136,100 jobs — an all-time high.
In Fort Lauderdale, employment growth grew by 3.5 percent in 2015. According to the report, Ten-X projects continued growth of 3 percent or more in each of the next three years.
Never miss a local story.
The employment growth will fuel the retail sector, the report predicts, lowering the amount of vacant positions in the retail market. In Miami, vacancies are expected to decrease from 6 percent in 2015 to 4.2 percent in 2019. In Fort Lauderdale, vacancies are projected to drop by 2.5 percent, from 9.2 to 6.7 percent over the same time period.
136,100 Number of jobs in the Miami hospitality and leisure sector in 2015, an all-time high.
Meanwhile, demand in both markets is expected to increase rents for retail space, by 17.4 percent in Miami and 16 percent in Fort Lauderdale.
The report does not include the many new and renovated retail options expected to come online in the next several years.
Brickell City Centre’s 500,000-square-foot open-air shopping center opens this fall, Aventura and Dadeland Malls are going through expansions, the Design District will add 60 stores and restaurants by mid-2017, Miami Worldcenter in Downtown Miami will debut an open-air shopping center in fall 2018, and Lincoln Road in Miami Beach, Miracle Mile in Coral Gables and Flagler Street in downtown Miami are also getting retail redos. In Broward County, the Fashion Mall in Plantation will be replaced with an open-air shopping center and Sawgrass Mills, America’s largest outlet mall, is getting a new wing.
The U.S.’s largest mall, the proposed 200-acre American Dream Miami, may also be coming to Northwest Miami-Dade, if approved by the county. A traffic study by developer Triple Five places the project’s completion date in 2020.
The other “buy” markets in the top five were Austin, Texas; northern Virginia and Los Angeles, California respectively. The top five “sell” markets, in which investors are encouraged to sell their retail properties, are central New Jersey; Detroit, Michigan; Baltimore, Maryland; Cleveland, Ohio and Memphis, Tennessee.