Posts By : Miami Today

Long slog of Miracle Mile revamp alters business scene

WEEK OF THURSDAY, APRIL 13, 2017

A Singular Voice in an Evolving City.


COMMERCIAL & OFFICE SPACE


Long slog of Miracle Mile revamp alters business scene

By Catherine Lackner

The renovation of Miracle Mile and Gerald Avenue has been a long slog and, with completion set for January, it’s far from over. Stakeholders on the streets have experienced the construction differently.

“We’ve been very fortunate, but we are sensitive to the fact that others have had serious difficulties,” said Barbara Stein, executive producing director of the Actors’ Playhouse at the Miracle Theatre, 280 Miracle Mile.

“We’ve become somewhat of a destination, and people seem to be able to get to the theater on time,” she said. “People have a choice to see or not see the show, and we’ve had some good series.”

Parking is a challenge, she said, “but parking is always a challenge, and not just in Coral Gables, but everywhere. We’re hoping the return of valet service will help.”

On balance, Ms. Stein called the renovation “a little bit of pain for some gain.

“These are going to be amazing improvements, and we hope that the people we bring in will help generate opportunities for everyone,” she said. “We’re all working together for the prosperity of the community.”

An unintended consequence of the renovation forced Flowers & Services, formerly of 366 Miracle Mile, to leave the city.

“Due to the construction, the owner of our former location raised the rent from $4,000 to $11,000,” said Maria Budow, co-owner of the business. “We moved. Once the renovation is done, a restaurant can come in there and put tables on the sidewalks, which we couldn’t do.”

Flowers & Services moved to 6600 Coral Way. “It’s really nice and there’s plenty of parking,” Ms. Budow said. “We’re happy.”

Rent increases may be part of a trend, said Rafael Romero, Vice President of CREC, via email.

“While some retailers may not survive these challenging times, the long-term gains will deliver enhanced tenants and increased market vitality. With less than a 3% retail vacancy rate in Miami today, any vacancies will be absorbed quickly in this area.

“We expect landlords of existing retail buildings to upgrade infrastructure to meet the vision of the new streetscape, playing a significant role in the new retail aesthetic,” said Mr. Romero, whose office at 2121 Ponce de Leon Blvd. is two blocks from Giralda Avenue and four blocks from Miracle Mile. “Coral Gables will also need to work closely with the surrounding landlords to deliver a destination with a synergetic tenant mix.”

“This is a defining moment for downtown Coral Gables,” said Christopher Brown, co-developer of Giralda Place, a nine-story, 33-unit condominium project at 2222 Ponce de Leon Blvd., which will have 13,390 square feet of ground-floor retail and about 100,000 square feet of office space.

“We’re already seeing growing interest in Giralda Place due to the streetscape project taking shape across the street. While tenants have seen a dry sales period, there is real buzz surrounding the streetscape’s completion and resulting increase in foot traffic,” he said via email.

“The improvements will greatly benefit current retail tenants by helping to boost lost revenue from the heavy construction and providing them with a competitive advantage, as there are no other thoroughfares in the vicinity that share the same attributes.”

“We invite people to come experience the progress of the Miracle Mile streetscape as you stroll the south side of the 100 and 200 blocks of Miracle Mile [which house] the Miracle Theatre, Barnes & Noble and dozens of quality shops and eateries,” said Javier Betancourt, Coral Gables economic development director, via email.

“Hand-cut stone pavers – inspired by our beautiful South Florida skies – are being meticulously installed on ultra-wide sidewalks to create a captivating pedestrian experience for locals and visitors alike,” he said. “The first phase of this multimillion-dollar renaissance has successfully addressed long-standing drainage issues while installing high speed fiber, new shade trees, and specialty lighting. The drainage work is done and the magic is now taking shape.”

The first phase of the Giralda Plaza streetscape is taking shape, as well, he said. “To celebrate,

‘Parking is always a challenge, and not just in Coral Gables, but everywhere. We’re hoping the return of the valet service will help.’

Barbara Stein


‘While some retailers may not survive these challenging time, the long-term gains will deliver enhanced tenants and increased market vitality.’

Rafael Romero


many of the restaurants along ‘restaurant row,’ (the 100 block of Giralda Avenue) will operate impromptu outdoor cafes in the plaza each Saturday from breakfast to midnight.

“Entitled Giralda Alfresco, these Saturday experiences will allow us to get a taste of what’s to come, because it’s just too pretty now to wait until summer, when it’s officially complete,” Mr. Betancourt said.

The project – which was discussed for years before the first inch of pavement was broken – will create streets that are more walkable, vibrant and attractive, he said. Giralda Plaza is scheduled for completion by early summer, and seven of Miracle Mile’s eight blocks are scheduled for completion by November of this year (in time for the holiday season), with the last block slated for completion by January 2018.

“The city is sensitive to the hardships faced by merchants during this period of construction,” he said. Coral Gables has taken steps to support the merchants, including:

‘While tenants have seen a dry sales period, there is a real buzz surrounding the streetscape’s completion and resulting increase in foot traffic.’

Christopher Brown


‘The first phase of this multimillion-dollar renaissance has successfully addressed long-standing drainage issues while installing high speed fiber.’

Javier Betancourt


  • Working with the contractor to accelerate and expedite the work.
  • Attracting people to downtown through a variety of free events, such as Wellness Wednesdays, Jazz in the Gables, Movies on the Mile and Giralda Al Fresco.
  • Providing discounted or complementary parking for customers, including free parking vouchers and free valet vouchers for Giralda Avenue merchants.
  • Conducting a robust marketing and advertising campaign in publications and social media.
  • Installing more than 180 business continuity parking and wayfinding signs.
  • Waiving city permit fees and expediting permitting for facade improvements.
  • Providing flexibility with respect to certain code enforcement regulations.
  • Enhancing privately owned paseos at the city’s expense.
  • Providing rent abatement for retail tenants in city-owned properties.
With high connectivity, Doral offices 98% full, values reported holding

Office values continue to hold strong in Doral, says Douglas Okun, senior vice president of CREC, which manages the Lennar Corporate Center, where occupancy sits at 98%…

Click on icon to view or download PDF


Archives:
Tight little island: office space on Miami Beach scarce

As it has historically been, Miami Beach remains a boutique market with very little office space available, sparse parking and no new construction on the horizon, experts say…

Click on icon to view or download PDF


Archives:
Seven Office Components Headed for Doral

Responding to market demand, several new office spaces are taking shape in Doral, while there is churn in the market farther east in Waterford, sources say…

Click on icon to view or download PDF


Archives:
Brickell Retail at Premium, with Rents Doubling in a Year

3.9.16-Miami-Today-Brickell-retail-at-premiumWith the opening this fall of Brickell City Centre’s luxury open-air mall and a flood of new residents expected, Brickell has emerged as a sought-after retail spot. …

…  “It’s true that retail follows rooftops,” said Rafael Romero, associate vice president of CREC, “but ‘rooftops’ is just another way of saying ‘people,’ and the rooftops-the people-are here.” One of Brickell’s key advantages is public transit…

Click on icon to view or download PDF


Archives:
With no new construction,
Doral office space demand rises

Though it is far from the central business district – or maybe because it is – office space in Doral continues to be a hot commodity. “The Doral office market is very active, for several reasons,”…

Click icon to read more or download PDF


Archives:
Downtown Dadeland’s demand seen increasing with residence openings

Despite coming onto the market in the mid-2000s, shortly before the global recession, Downtown Dadeland has enjoyed remarkable popularity. Anchored by a Metrorail line and adjacent to US 1, Kendall Drive and the Palmetto Expressway, the mixed-use complex offers residential, shopping, restaurants, hotels…

Click icon to read more or download PDF


Archives:
Escalating Shopping Center Rents Show No Signs of Abating
Miami Today  |  By Catherine Lackner

Retail and shopping-center space in Miami-Dade County is fetching escalating rental rates that show no signs of abating, said Steven Henenfeld (pictured), Vice President of Continental Real Estate Companies (CREC). Vacancy rates are “touching historic lows,” he added.

“Leasing is doing extremely well,” with overall vacancy rates in Kendall standing at only 3%, though there may be individual variations. Some centers in Doral are fully leased, he added.

The area east of I-95 is exploding with high-end retailers paying high-end rents, Mr. Henenfeld said. Brickell, the Design District, Miami Beach – as well as retail planned for Miami Worldcenter – “all is becoming Bal Harbour,” he said.

In Wynwood, retail space is going for more than $50 per square foot, in Brickell for $80-$100 per square foot, in excess of $100 per square foot in the Design District, and higher than $300 per square foot on Lincoln Road, “and these are triple-net leases,” he said.

On the west side of I-95, a tenant could expect to pay “in the high teens into the $20s for a junior big-box” of about 25,000 square feet in Kendall, in the high $30-$40s per square foot in East Kendall, and in the $50 per square foot range in Doral.

“In these markets, even when things were booming in the past, we didn’t see rents like these,” Mr. Henenfeld said.

The reason? “Simple economics – supply and demand,” he said. “There’s a land shortage, and no more places to grow.”

There havs been an explosion of residential development, which creates more demand for retail, he added. The growing economy also provides fuel, he said. “People think the economy is doing extremely well right now, and it reflects their optimism.”

At Dolphin Mall, it’s not only the strength of the American economy, but also Miami’s appeal to international shoppers that has not only kept the mall healthy but triggered a recent expansion that will add five new restaurants, a new valet service and a 1,300-space parking garage.

The mall, which bills itself as Miami-Dade’s largest outlet mall, with 240 stores in 1.4 million square feet, draws a combination of locals as well as domestic and international tourists, said Pete Marrero, mall general manager.

“We have a diversity of customers, with the vast majority of international tourists coming from South America,” he said. For an international destination, South Florida is under-retailed, he said. “I don’t think we have reached the saturation point.”

Even if more retail were to be added, “it might hurt us in the short-term, but on a long-term basis it will only help bring in that many more tourists.”

Investors and lenders have noticed retail’s robust growth, said Jason Shapiro managing director of the Aztec Group.

“We’ve seen a fair amount of transactions happening, both on the investment and financing sides. Lenders are increasing their loan-to-cost or loan-to-value spread.”

For example, on a recent Miami-Dade construction-loan transaction for a center anchored by a Publix, during the pre-leasing process rents rose dramatically, he said. “Over a span of three to six months overall, on average, rents were 20% higher toward the end of the cycle. That supports the positive nature of the things that are going on in retail.”

A number of factors are responsible, he said. “The economy continues to improve in Miami-Dade County and there are unique global sources of capital coming in all the time, seeking investments of this type. There’s only so much land available.”

Future forward movement “depends on interest rates,” he said, “But in the short term I expect it to continue.”

Archives:
Doral becomes heart of West Dade’s high-end office market

The West Dade office market, which years ago comprised buildings near Miami International Airport with small pockets near Dadeland and Kendall, now has coalesced around the Doral area, observers say, where class A space is in strong demand…

Click icon to view or download PDF


Archives:
Developers seek retail strips as commercial land values soar

Market watchers agree there will always be demand for commercially-zoned land in South Beach but see other areas growing in popularity and value.

Land in the downtown Miami area is just picking up steam compared with Brickell, said Jason Katz, vice president for the Aztec Group. “Zoning is the most ripe in the central business district,” he said. “It’s the densest neighborhood with the highest available height [allowed].”

Developers are buying big retail strips, Mr. Katz said and paying anywhere from $350 to $700 per square foot for the land.

“Before this market cycle, Flagler Street and Miami Avenue weren’t getting as much attention,” he said/ “In the past three years, however, with Miami Worldcenter and the announcement of All Aboard Florida, people saw a more defined neighborhood with major job generators and retail centers.

Prices for commercially-zoned land are highest in South Beach and Brickell but are rising in other markets, Mr Katz said. When he first came to Avatar, land prices in Edgewater were about $100 per square foot but now have risen to $300 per square foot.

Now, Mr. Katz said, there are high-rise luxury condos along the Biscayne Boulevard corridor and a lot of retail coming. “There aren’t a lot of tenants, but a lot is planned for what will be a hot retail corridor.”

The market is getting back to normal as developers realize people want to live in a variety of buildings, whether high-rise or smaller, said Peter Mekras, Senior Vice President at CREC. “Demand is broader now.”

Pricing continues to increase in urban infill areas because residential demand continues, he said but suburban trends are on the upswing anywhere east of I-95 and close to main corridors. He pointed to Doral, parts of South Dade and Homestead as areas where demand is increasing.

There’s very little land left, especially in the urban core, said Jim Shindell, partner at Bilzin Sumberg and the firms real estate practice group chair. He said demand is growing for land extending from the Design District to the north and Coconut Grove to the south.

Mr. Shindell said the sale of a 1.4-acre site at 300 Biscayne Boulevard Way in July for $125 million caught everyone’s attention.

He said other prices have been “hefty” and it will take time before it’s clear what’s expensive, given that buyers have different objectives.

It’s not so much the closed land sales that drive value but, rather, how a parcel can be used, said Mr. Mekras.

In some areas, potential use is limited, Mr. Shindell said. “Condos give returns that will cover the cost of the land.”

He points to the increasing cranes on the skyline in Edgewater and said that area will be transformed.

Demand remains high for waterfront land, said Jeff Cohen, senior vice president of the commercial division for Avatar Real Estate services. “Prices are crazy,” he said. “there’s virtually no more land available on the waterfront.”

Mr. Cohen said areas where there’s current demand for commercially-zoned land include Miami Beach, Surfside, Coconut Grove and – although diminishing a bit – Sunny Isles.

People are paying to own assets in the urban area, Mr. Shindell said. “Prices increased when we came out of the downturn and the world got its feet under itself,” he said. “Then prices went up more substantially as land was acquired for condo development.”

The downtown area “got its legs and transformed itself to an area it wasn’t before,” Mr. Shindell said. “there’s an effect on an asset class now that people want to work and live there.

Archives: