South Florida Retail Report

a Cushman & Wakefield Research Report

NOT A REVOLUTION BUT EVOLUTION Review of Drivers and Dynamics Behind South Florida’s New Retail Landscape.

j

Lake Okeechobee

Jupiter

Palm Beach Gardens

West Palm Beach

Lake Worth

Loxahatchee Nat'l Wildlife Refuge

¨ § ¦ 95

j

Delray Beach

Boca Raton

Coral Springs

Pompano Beach

Fort Lauderdale

Miccosukee Indian Reservation

Pembroke Pines

Hollywood

Miramar

Miami Gardens

Hialeah

Miami

Homestead

AT THE CENTEROF WHAT’S NEXT INRETAIL

REVITALIZED RETAIL

EXCITEMENT GROWS IN SOUTH FLORIDA The retail landscape experienced significant changes and innovation as Covid-19 reshaped how consumers live, work and shop. South Florida was hit hard by the pandemic as shops, restaurants, gyms, as well as other retail facilities were closed for several months and retail

As the seventh largest Metropolitan Statistical Area (MSA) in the United States, the three counties in South Florida (Miami-Dade, Broward and Palm Beach) are expected to add more residents in the future than most other large metros, including positive migration. South Florida is also one of the most diverse metros in the country and an ideal environment for the confluence of wealth and consumer spending. The region benefits from a unique population that includes people from more than 100 countries with nearly half of the college graduates multilingual. These dynamics provide retailers with a broad base of customers to pull into experiential retail concepts as well as experimenting with how retail reaches its audience.

vacancies hit all-time highs. While retail in South Florida was not immune to the challenges the sector faced post-pandemic, the region has several factors playing in its favor that help with revitalizing retail’s outlook sooner than in many other parts of the U.S. South Florida consistently ranks as one of the top-performing tourism and hotel markets. With international tourism expected to return in November, the retail market was expected to recover at a quicker pace as international travelers are drawn to South Florida’s beaches, art, culture and vast array of shopping and dining options.

South Florida has seen an influx of high- net-worth individuals and become a magnet for affluent executives and professionals across all industries including financial services and technology.

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South Florida Population Growth

South Florida's population was expected to grow by 6% by 2025, more than twice the national average of 2.4% for the same time period

2025 Projected Population Breakdown

1.62M

2.83M

2.06M

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DRIVERS: TOURISM

VIBRANT TOURIST & HOSPITALITY SECTORS

HOTEL ROOMS 126,722

OCCUPANCY 70.5%

AVERAGE DAILY RATE $196.55

"Out of the top 25 hotel markets, Miami-Dade ranked number 1 in Revenue Per Available (RevPAR) Room for 2020"

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South Florida Boat Shows

South Beach

Las Olas Boulevard

Flagler Museum

Art Basel Miami

Hard Rock Stadium

South Florida Symphony

Broward Performing Arts

DRIVERS: CONNECTVITY

AIRPORTS South Florida has three international airports with over 300 direct flights making it one of the top international hubs in the country. All three airports serviced over 65.4 million passengers in 2020 and

contributed over 579,000 jobs to the region directly and indirectly.

#1 International Freight #3 International Passengers

PORTS South Florida’s three ports process a large amount of passengers and cargo. They handled over 2.2 million twenty-foot equivalents (TEUs) in 2020 and are crucial economic drivers for the region. The PortMiami and Port Everglades combined are considered the cruise capital of the world. In 2020, cruises lines were forced to stay put for most of the year. However, in 2021 demand and bookings picked up and in some respects outpaced 2019 numbers. Major cruise lines, including Viking, Norwegian, Royal Caribean, and Carnival all state that consumer demand for 2022 could potentially be stronger than in 2019. area’s most significant trade partners are in Latin America/Caribbean followed by Asia.

#1 Cruise Port in the World

#4 Busiest container port among Florida’s 15 deepwater ports

#3 Cruise Port in the World

BRIGHTLINE Brightline is a high-speed passenger rail that currently connects Miami, Fort Lauderdale

and West Palm Beach. Additional stations are planned for Aventura, Boca Raton, Orlando, Tampa, Disney, and PortMiami. The Orlando Station is currently under construction and expected to deliver in 2022.

County Transportation

Brightline Station

Coming Soon • Aventura • Boca Raton • PortMiami • Orlando • Tampa

County Airport

Distance / Driving Time to Brightline Station

Distance / Driving Time to Airports

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¨ § ¦ 95

Lake Okeechobee

West Palm Beach

Loxahatchee Nat'l Wildlife Refuge

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Big Cypress Reservation

Ref

¨ § ¦ 75

Miccosukee Indian Reservation

Fort Lauderdale

Cypress National Preserve

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Atlantic Ocean

Miami

Ports International Airports Brightline Stations Future Stations

Everglades National Park

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RETAIL SALES

Total retail sales rebounded in 2021 even though employment was not expected to recover until the end of 2023. South Florida retail sales were expected to see an increase over $40 billion, up 20.4%, by the end of 2021 compared to year-end 2020. The Retail and Leisure/Hospitality industry sectors will take time to recover from heavy losses in 2020. Only half of those jobs have come back. There is room for improvement as employment in both sectors was expected to reach pre pandemic levels by 2023. The rise of the Delta Covid variant at the end of the summer and the lack of a pick up in business travel are not expected to dampen consumer demand much in South Florida. As tourism and travel opens up more next year, the regions recovery will continue to outpace most of the rest of the country.

South Florida Total Retail Sales

South Florida retail sales in 2021 were expected to reach over $173 billion , a 22.5% increase compared to the pre-pandemic level in 2019.

South Florida Industry Employment

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NEW-TO-MARKET RESTAURANTS

Notable Entrants Miami-Dade County • Red Rooster • Lucky Cat • ZZ’s Sushi Bar • Maple & Ash • Carbone • Etta

The influx of new residents as well as weekly announcements of financial services and hedge fund companies relocating to South Florida, has been followed by the introduction of several new restaurant concepts catering to both middle market and affluent transplants. A major factor for the area’s attractiveness was the fact that Florida was one of the first states to nix restrictions on in-person dining In many instances, New-To-Market (NTM) concepts are South Florida out posts of well established brands from the Northeast or Chicago. Notable restaurants include: Red Rooster (Celebrity Chef Marcus Samuelsson), Lucky Cat (Celebrity Chef Gordon Ramsey), Carbone (Major Food Group) and Maple & Ash (Chicago Chef Danny Grant) Most restaurant transplants have an established following and built in customer base locally. These operators are willing to pay top price for premier spaces. Rents in the region are significantly lower than the rents they are paying back home in California or the Northeast.

Broward County • Fogo De Chao • Sushi Maki • Maison du Crab

Palm Beach County • Throw Social • Avalon Steak • Lionfish • Delray Beach Market

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THE E-COMMERCE FACTOR

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can also be part of a last-mile delivery and fulfillment strategy. South Florida is a key region for retailers because the number of consumers and buying power it has. Amazon, the largest e-commerce company, has plans to open several physical retail locations across the country. The locations were expected to be around 30,000 square feet, much smaller than the typical 100,000 square feet for most department stores. Warby Parker, another e-commerce company, also has plans to open 30-35 new physical locations annually.

E-commerce is a major player in the retail landscape and the Pandemic only accelerated online buying trends. E-commerce sales were only 14% of all retail sales in 2020 and the number was expected to grow to 20% over the next 5 years. Physical stores remain a priority for retailers. In fact, several E-commerce companies are opening brick-and- mortar stores to maintain a direct touch point with customers. These standalone touch-points serve as a driver for brand awareness and as a connection to the online marketplace. New physical stores

There was a 31.7% increase in e-commerce sales from 2019 to 2020 , the largest year-over- year (YOY) increase ever recorded.

U.S. E-commerce Sales

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CAPITAL MARKETS

Key Sales Transactions YTD 2021 COUNTY PROPERTY

Submarket

Seller/Buyer

SF

Price/$ Psf

Hudson Capital Group / Skad USA Properties

Broward

3400-3580 N Andrews Avenue

Fort Lauderdale

158,816 $23.4M/$147

Weingarten /JBL Asset Management

Broward

Flamingo Pines Plaza

SW Broward

139,628 $33.2M/$238

Royal Palm Beach/ Wellington

Royal Palm Beach Shopping Plaza LLC/Iberic Malls

Palm Beach

Royal Plaza

98,515 $10.0M/$102

Broward

The Shoppes Of Oakland Forest

Commercial Blvd Country Wide Mortgage Funding, LLC/ACS 2901 LLC 97,000 $10.7M/$110

Janoura Realty/Nob Hill Place Sunrise LLC Tricor International Corporation/Cobblestone USA LLC

Broward

10041-10125 Sunset Strip

Plantation

90,951

$23.5M/$258

Palm Beach

8811-8899 W Boynton Beach Blvd

Boynton/Lantana

88,788 $37.6M/$423

Northbridge Capital /A Plus Mini Storage

Miami

16500-16650 SW 88th Street

Kendall

78,644 $22.4M/$284

Rajen Properties LLC / CWS Acquisition, LLC

Miami

2690 SW 22nd Street

Coral Gables

69,299 $24.2M/$349

Investor interest in South Florida retail assets rebounded in 2021 after a severe decrease in the number of sales in 2020. Average sales price per square foot increased by 12% in 2021 compared to 2020 and by 25% compared to 2019. Grocery anchored retail centers were one of the hottest segments for investors in South Florida and the most resilient asset type during the pandemic. Capital Markets in South Florida’s retail market was influenced by Kimco, one of North America’s largest publicly traded owners and operators of shopping centers, merger with Weingarten Realty which included numerous properties in South Florida.

Average P/SF ($)

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RETAIL LEASING 7

South Florida Leasing Activity

Retailers in South Florida regained confidence in 2021 as leasing activity recovered to pre-pandemic levels. The second quarter this year had over 2.1 million square feet leased, the most activity in a single quarter since early 2017. Market areas such as Wynwood, Miami Design District, FAT Village, Boca Raton, and Downtown West Palm Beach had increased demand. Restaurant operators and fitness centers expanded to take advantage of less restrictions in the region compared to other major metros.

Key Lease Transactions YTD 2021 COUNTY PROPERTY

TENANT

LEASED SF

Miami-Dade

3825 NW 7th St

77,471

Miami-Dade

8811-8851 SW 107th Ave

45,000

Broward

8333-8399 Pines Blvd

44,180

Broward

7700-7750 Peters Rd

41,440

Broward

4021-4299 W Commercial Blvd

37,480

Miami-Dade

8700 NW 36th Ave

35,500

Miami-Dade

19915-19925 Biscayne Blvd

35,000

Palm Beach

6673 Boynton Beach Blvd

34,100

Palm Beach

2501-2565 N Dixie Hwy

25,600

Palm Beach

1901 S Military Trail

23,632

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MIAMI-DADE RETAIL MARKET

Miami’s retail vacancy rate hit a 10-year high in 2020 as many retail storefronts were left vacant due to the pandemic. However, conditions in 2021 have improved. The vacancy level has decreased and asking rents have continued to rise, with a 4.3% increase from 2019, albeit at a slower pace than pre- pandemic. Miami has also benefited from an influx of new residents, companies, and restaurants/retailers that have migrated to the region from areas such as the Northeast and California.

Quick Stats

Inventory: 136 MSF Average Asking Rate: $37.87/NNN Vacancy Rate: 3.8% Under Construction: 3.7 MSF

Source : Costar

Key Areas/Developments

NW 23rd Ave

Wynwood Historically known for warehouses and factories, Wynwood transformed into one of the most vibrant districts in all of South Florida. Known for it’s art galleries, retail stores and bars/ restaurants, Wynwood is a premier international destination for art, fashion, and innovation becoming a true 24/7 community. The area is one of three locations in the world to host the international art fair, Art Basel. Miami Design District Minutes away from Wynwood, the Miami Design District is one of the world’s premier luxury-retail destinations with Dior, Hermes, Louis Vuitton and many more establishing a presence. The Design District’s numerous dining spots are from renowned chefs from all over the world. Miami WorldCenter Miami Worldcenter is being developed into a dynamic destination to experience the best of shopping, dining and entertainment in Miami. The project is expected to bring over 300,000 square feet of retail and over 40 dining, shopping, and entertainment opportunities once completed. Miami Beach Miami Beach continues to be one of the strongest retail trade areas in Miami-Dade, supported by domestic and international visitors as well as affluent full-time and seasonal residents. The Lincoln Road and Collins Avenue retail corridors are two of the most well known high-streets in the country. As tourism rebounds further in 2022, the underlying fundamentals of Miami Beach remain a strong attractor to retailers.

NW 24th Ave

N

Airpor

NW 11

Beacom

SW 24

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I-95 Express Ln

NW 75th St

NE 4th Ct

NW 71st St

rD ecrogaL

UV 907

UV A1A

£ ¤ 441

£ ¤ 1

NW 2nd Ave

NW 23rd Ave

NW 21st Ave

NW 17th Ave

NW 56th St

NE 54th St

NW 54th St

¨ § ¦ 95

NW 50th St

NW 46th St

NW 46th St

NW 3rd Ave

rt Expy

NW 39th St

Airport Expy

¨ § ¦ 195

£ ¤ 27

NE 36th St

Miami Beach Pine Tree Dr Washington Ave 23rd St

NW 19th Ave

NW 22nd Ave

NW 1st Ave

I-95 Express Ln

NW 29th St

¨ § ¦ 95

N Miami Ave

NW 23rd St

NW 10th Ave

NE 2nd Ave

NE 20th St

NW 20th St

17th St Dade Blvd

Venetian Way

Venetian Way

NE 14th St

NW 3rd Ave

NW 14th St

NW 12th St

NW 11th St

NE 1st Ave

UV 933

1th St

NW 7th St

NW 6th St

UV A1A

Miami

NW 3rd St

Meridian Ave

UV 968

SE 1st St SW 2nd Ave SE 4th St

SW 4th Ave

Fisher Island Fry

NW 7th Ave

Lummus Island

£ ¤ 41

com Blvd

evA imaiM S SW 1st Ave

Broadway

SW 11th St

Biscayne Bay

SW 17th Ave

SW 24

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W 19th Ave

BROWARD RETAIL MARKET

Broward’s retail vacancy hit 5.3% in 2020, a 5-year high, due to many permanent store closings. Since the start of 2021, the vacancy rate dropped by 30 basis points each quarter. Asking rates remained steady over the last 2 years between $23.00-$24.00 per square foot. A main driver for broward county’s retail market is the growth in residential population. Over 5,100 multifamily units absorbed in 2020, the most in the three counties of South Florida as well as in the last 10 years. The influx of people moving to Broward county was a factor in revitalizing the retail market.

Quick Stats

Inventory: 110 MSF Average Asking Rate: $24.20/NNN Vacancy Rate: 4.5% Under Construction: 467,053 SF

Source : Costar

Key Areas/Developments

Key Areas/Developments Dania Beach

Dania Beach is set between the city of Hollywood and Downtown Fort Lauderdale and is touted as Broward’s first incorporated city. The area is known for its marine activities with major stores such as Bass Pro Shops and Diver’s Direct. Recent attractions stem from Dania Pointe, a premier mixed-used development with nearly 1.0 msf of retail as well as Class A office, hotels, luxury apartments, and public event spaces. Notable retail shops and restaurants include: Urban Outfitters, Brandmart USA, Burger Fi, Five Below, Hobby Lobby, Outback Steakhouse, and Toojay’s. FAT Village FAT Village stands for Flagler Arts and Technology Village. It is Fort Lauderdale’s only Urban Arts District and it will undergo redevelopment on both sides of NW 1st Avenue just south of Sistrunk. The West side of the project will contain 150,000 sf of office space and 125 affordable housing units. The East side portion of the project will contain 307 market-rate residential units, a parking garage, and hotel. Retail and art will be a prominent feature throughout FAT Village. Sawgrass Mills Located in West Broward, Sawgrass Mills is the nations largest single story mall at over 2.3 million square feet. The mall is locally known as a major tourist destination for cruise visitors. It has over 350 retail stores as well as many dining and hotel options.

UV

I

S

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nd Ave

dR lliH boN N

E Prospect Rd

evA ts12 WN

NW 44th St

UV 869

evA swerdnA N

Sunrise

Rock Island Rd

dR dnalsI eniP N

N Nob Hill Rd

UV 817

evA ht46 WN

UV 869

dR ognimalF N

evA ts13 WN

Wilton Manors

Sunset Strip

NW 19th St

ekpT s'adirolF

UV 838

Sunset Strip

NE 13th St

NW 13th St

evA ht631 WN

Markham Park

dR sutaiH S

NW 56th Ave

j

Cleary Blvd

evA ht7 WN

UV 84

NE 6th St

W Sistrunk Blvd

Fort Lauderdale

NW 124th Ave W Broward Blvd

W Broward Blvd

evA swerdnA S

evA ht45 WS

UV 823

¨ § ¦ 95

evA ts13 WS

S Nob Hill Rd

Indian Trce

Peters Rd

evA ht4 WS

SW 14th St

evA ht631 WS

¨ § ¦ 95

Broward

evA ht451 WS

SW 24th St

Nova Dr

SW 24th St

SW 26th St

Weston

Broward College-Central

UV 817

S Pine Island Rd

Ft Lauderdale/Hollywood Int'l Arpt

Weston Rd

Tree Tops Park

S Post Rd

£ ¤ 441

I-95 Express Ln

j

Vista View Park

£ ¤ 1

j

Orange Dr

Orange Dr

SW 45th St

SW 45th St

SW 30th Ave

Cooper City

I-75 Express Lanes

evA srelgnA

Florida's Tpke

Dania Beach

UV 823

£ ¤ 441

SW 100th Ave

Davie Rd

Stirling Rd

N Park Rd Stirling Rd

UV 848

SW 40th Ave

Stirling Rd

Dykes Rd

Hollywood Reservation

West Lake Park

j

Brian Piccolo Park

j

W Dixie Hwy

NW 25th St

Hiatus Rd

Sheridan St

Sheridan St

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evA ts12

Taft St

Taft St

Taft St

dR k

Atlantic Ocea

nL

Hiatus Rd

9th Ave

nd Ave

N 56th Ave

N 72nd Ave

m Ave

PALM BEACH RETAIL MARKET

Palm Beach’s retail market remained stable over the last year even through the pandemic. Vacancy reached a high of 4.9% during the height of the pandemic, but only 70 basis points higher than the 5-year average. Triple net asking rates increased to $26.34 psf, up 6.6% over the year. Similiar to Miami-Dade, Palm Beach county was a hot spot for new residents and companies from the Northeast, bolstering retail growth in area high streets, like Worth Avenue, as well as suburban submarkets.

Quick Stats

Inventory: 80 MSF Average Asking Rate: $26.34/NNN Vacancy Rate: 4.5% Under Construction: 516,304 SF

Source : Costar

Key Areas/Developments

Key Areas/Developments Downtown Boca Raton

Set in the southern most part of Palm Beach County, Boca Raton is known as one of the most luxurious suburban areas in the tri-county area. Mizner Park serves as Downtown Boca Raton’s premier shopping destination. The site is slated for redevelopment of it’s amphitheater which will help draw more crowds for various events. Mizner’s outdoor, park-like environment, caters to social, entertainment, and dining experiences as well as luxury designer stores for visitors. Delray Beach - Atlantic Avenue Downtown Delray is located between Boca Raton and West Palm Beach. It is locally known as a beach town with old Florida historic structures. Atlantic Avenue, locally known as The Ave, is Delray Beach’s main street for nightlife, entertainment, dining, and shopping. Sundy Village , a new mixed-use development, will have 26,000 sf of retail and restaurant space as well as an underground garage with 267 spaces. Historical homes will be preserved and operate as 7,000 sf of retail. Worth Avenue Worth Avenue, Palm Beach County’s most opulant area, is located on Palm Beach Island. Palm Beach Island is known for famously wealthy individuals to live as well as vacation in winter months. The renowned Worth Avenue is the area’s main retail corridor and is arguably one of America’s most upscale shopping districts with designer stores and high-end restaurants.

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UV 700

¨ § ¦ 95

UV 809

West Palm Beach

Royal Palm Beach

£ ¤ 441

Palm Beach Int'l Airport

Okeeheelee Park

j

Wellington

Greenacres

Lake Worth

ekpT s'adirolF ekpT s'adirolF

£ ¤ 441

Palm Beach

Boynton Beach

Atlantic Ocean

Loxahatchee Nat'l Wildlife Refuge

G G 809

j

G 809

Delray Beach

UV 806

UV A1A

South County Regional Park

£ ¤ 1

j

Boca Raton

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Deerfield Beach

AT THE CENTEROF WHAT’S NEXT INRETAIL

For more information, please contact:

TREY DAVIS Trey Davis Associate Director +1 305 533 2846 trey.davis@cushwake.com

MATT BALLARD Research Analyst +1 954 377 0493 matthew.ballard@cushwake.com

Sources

Cushman and Wakefield Research BH3 CoStar/STR Greater Miami Convention on Tourism Bureau Miami Design District Miami Worldcenter Moodys Analytics Real Capital Analytics South Florida Business Journal Wall Street Journal Wynwood Business Improvement District

CUSHMAN & WAKEFIELD OF FLORIDA, LLC

333 SE 2nd Avenue, Suite 3900 Miami, Florida 33131 | USA

515 E Las Olas Boulevard., Suite 900 Ft. Lauderdale, FL 33301 | USA 225 NE Mizner Boulevard, Suite 300 Boca Raton, FL 33432 | USA

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