New Restaurants from Groot Hospitality Coming to Coconut Grove
New Restaurants from Groot Hospitality Coming to Coconut Grove
You can’t open a newspaper these days without reading about another company that is either relocating or expanding in South Florida. From hedge funds and private equity firms to tech companies, Florida’s business friendly environment is luring people to move here. The Miami-Dade housing market has surged, with total home sales up 16.2% year-over-year in October. Miami single-family luxury home sales transactions over $1,000,000 increased a whopping 122.1% year-over-year in October.
What does this increase in the housing market mean to commercial real estate? Although the virus has had an effect on hotels, restaurants, offices, and other businesses, which in turn bodes poorly for the real estate these businesses occupy, the number of people relocating here will eventually translate into increased demand for commercial real estate. I currently have investors looking for second generation restaurant space, which, amazingly enough, is not as easy to find as news headlines suggest.
According to economist Ted C. Jones, US retail sales and the demand for goods resulted in the freight rates for 20 foot containers from Shanghai to the US to increase approximately 125% in the past 12 months.
Another economist, Elliott Eisenberg PhD, also states that retail sales are terrific and that though we are buying goods online and curbside during the pandemic, it shows that consumer consumption has recovered.
What does that mean for commercial real estate in general and retail space specifically? I think there is a lot of pent up demand for going out, mingling with people, touching, feeling and trying on what people want to buy. With all of the people moving to South Florida, I think retail is going to rebound and will do so quickly. The products and services may change, but people still want an experience when they shop. At least I do!
Although not for the faint of heart, entrepreneurship offers many rewards and I think South Florida is the place to start a company or investing in real estate, which is entrepreneurial, than in South Florida.
Commercial real estate is different from residential real estate in so many ways, starting with finding it! Residential real estate has local MLS, Realtor.com, Zillow, Trulia, residential real estate company websites, and plenty of social media posts, pictures, and video.
Commercial real estate has always been a bit more elusive. Investors either relied on their network/word of mouth, commercial agent, or driving neighborhoods and knocking on doors. Commercial agents who didn’t have properties that met their investors’ criteria also relied on their network/word of mouth, driving neighborhoods and knocking on doors.
With the advent of the internet and rise of social media, real estate investors have become more efficient in their search for property and millennials are driving the demand for more information and data. As a result, there is a lot of money being spent on gathering commercial property data and developing new, on-line methods of marketing, some of which can be very expensive.
MIAMI Commercial, the commercial division of MIAMI Realtors, saw the need to provide both agents and the public with a transparent way of searching for commercial and investment property and, in September 2019, launched The South Florida Commercial MLS.
This platform takes all properties, excluding residential which are already on public platforms, that are listed in MIAMI Realtors MLS and allows the public to search for free, without registering or providing any contact information. It is intuitive and the searching public can choose to search in English, Spanish, or Portuguese, a variety of currencies, or in square feet or square meters.
The numbers relating to the public site for November are as follows:
4,064 listings
3,039 users
2,068 new users
25,087 page views
Argentina, Venezuela and China were the top four countries outside of the U.S that searched the site and the top three U.S. States outside of Florida were California, Texas, and North Carolina.
Searching for commercial property in South Florida? Your search just got a bit easier.
Consumer Spending at Luxury Retailers – Miami Design District
It seems like you couldn’t open a newspaper or business journal in 2017 without the headlines screaming, “Retail Is Dead“. There are lists of store closures for 2018 and many large retailers are on those lists. Toys R Us, Macy’s and The Gap are just a few that are closing stores and more companies will probably be added as the economy continues to improve but companies fail to adapt to the changing retail landscape.
E-commerce, demographics and consumer tastes are all contributing to the shift in, not death of, retail. As Arden Karson, Senior Managing Director of South Florida for CBRE, emphasized in her presentation at the 2018 CCIM Commercial Real Estate Outlook Conference, it isn’t that the consumer isn’t spending, or if they are they are only spending online, but rather that consumer spending is shifting. In what she calls an economic bifurcation, where consumers are shopping at luxury retailers, such as Louis Vitton, and discount retailers, such as Home Goods, consumers are shunning the department stores. Guess who makes up a large part of the closing lists? Yep, department stores.
As to whether or not Amazon will be the final nail in the coffin to brick and mortar retail, according to eMarketer Amazon accounts for 4% of online sales. Although online sales as a percent of consumer spending are increasing, they account for approximately 10% of retail sales and a lot of those sales are multi-channel, such as ordering online and picking up at the store or ordering online and then returning in the store. My experience with a lululemon gift from my husband is a great example of how shoppers are changing how they shop.
Lululemon Creates A Great Customer Experience
I love lululemon workout clothes so my thoughtful husband ordered me new running pants and a top as a gift. They were perfect, except the top was too large. Instead of packing up the top, printing out the return label, taking it to the UPS store to return, tracking the return and the credit, and then ordering another top that hopefully fit, I will be returning it to my nearest lululemon store, where I will try on tops to make sure they fit. So is retail dead? I don’t think so. The retailers that are doing well are adapting to what the consumer wants by making the entire purchasing process a pleasant experience. Today’s consumer is more interested in the shopping experience than in shopping itself and they share that experience, whether or good or bad, online.
If you are a landlord signing new leases in 2018, remember that the state sales tax on commercial leases has dropped from 6% to 5.8%. As a result, the sales tax rate in Miami-Dade County will drop to 6.8% and in Broward it will drop to 5.8%. Although the drop in rate may not sound like much, it amounts to an estimated $60 million a year savings to businesses.
Florida is the only state in the nation that charges a sales tax on all commercial leases and Florida Realtors, Florida Chamber, International Council of Shopping Centers, Florida Ports Council, and many others have been working diligently to get the tax reduced in order to keep Florida competitive with other states. The sales tax is levied on all businesses leases, large and small, regardless of profitability and therefore disproportionally affects small businesses and start ups. Florida Realtors will continue to work with legislators to get the tax on leases reduced further.
