Q2 2022 Retail Report: Miami
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In the second quarter of 2022, Miami’s retail sales totaled $6.46 billion, an increase of 6% over the same period last year according to CBRE’s Miami Q2 Retail Report.
Average retail space rents in Miami also trended upward despite a 1% increase in vacancy rates.
In the next two quarters, however, we estimate the amount of square footage leased in new projects will be 25% below what was leased during the past year.
Retail Sector Performance in Miami in Q2 2022
Overall, Miami’s retail sector had a good performance in the second quarter of 2022. Sales were up compared to the previous quarter as well as year-over-year.
Inflationary pressures continued to affect the sector, with prices rising for both goods and services.
Looking ahead to the rest of the year, we expect that Miami’s retail sector will continue to perform well, despite challenges posed by inflation slowing down its positive growth.
Q2 2022 Miami Retail Sector Performance by the Numbers
In the second quarter of 2022, retail sales in Miami increased by 3.4% over the previous quarter and 6% year-over-year. This performance was driven by strong growth in categories such as apparel, home furnishings, and electronics.
Additionally, average retail space rents in Miami increased by 2.5% during the quarter. Despite this strong performance, inflationary pressures are starting to affect the sector.
As a result, we expect to see a slowdown in retail sector growth in the second half of the year.
The Pacing of Retail Space Rents in Miami
According to MyEListing.com commercial listing data, average retail space rents in Miami were $37.02 per square foot in Q2 2022, a significant increase from the previous quarter’s average of $32.08 per square foot.
This increase is likely due to the continued growth of the retail sector in Miami, which has seen strong performance in recent years.
In addition, inflation has been a major factor in driving up retail space rents in Miami, as the cost of goods and services has increased.
Looking ahead, we expect Miami retail space rents to continue to rise at a moderate pace, as the city’s economy continues to grow ever slightly under inflationary pressures.
How is inflation affecting Miami’s retail performance?
Inflation has been affecting Miami’s retail sector performance in a number of ways by:
- Driving up the cost of goods, leading to higher prices for consumers.
- Eating into wages, putting a squeeze on consumer spending.
- Making it difficult for retailers to find workers, as people are increasingly priced out of the market.
- Making it difficult for retailers to find new locations or expand their businesses.
- Making it difficult for retailers to keep their inventory levels up, as they are often forced to sell items at a discount in order to stay afloat.
Despite these inflationary pressures and lower purchasing power, Miami’s retail sector performed well in Q2 2022, and we expect it to grow moderately in the second half of the year.
Notable Retail Space Acquisitions in Miami
In the second quarter of 2022, Miami’s retail sector had a number of notable acquisitions. The most notable was the purchase of the former Macy’s department store by Simon Property Group.
This is a positive sign for Miami’s retail sector, as it shows that there is still interest in investing in the city’s retail space. In addition, this purchase is likely to help increase rents in the city’s retail space, as Simon Property Group is one of the largest landlords in the United States.
Another notable acquisition was the purchase of a minority stake in the Miami Design District by Tishman Speyer.
This is another positive sign for Miami’s retail sector, as it shows that there is interest in investing in the city’s unique retail space.
Occupancy Rates in Miami’s Retail Sector
In the second quarter of 2022, Miami’s retail sector had an occupancy rate of 95.7%. This was a slight decrease from the previous quarter’s occupancy rate of 96.1%.
The decrease in occupancy can be attributed to the rise in inflation, which has caused many businesses to raise their prices.
Despite the decrease in occupancy, retail sales in Miami increased by 3.4% in the second quarter.
This may be due to an increase in tourism and an overall increase in disposable income.
Takeaways for Miami Retail Space Investors
Despite inflationary pressures and rising interest rates, the retail sector in Miami is fairing well:
- Miami’s retail sector had a strong second quarter in 2022, with sales up across the board.
- Retail space rents in Miami are on the rise, as demand for prime locations continues to increase.
- Inflation is starting to affect Miami’s retail sector, as prices for goods and services continue to rise.
- Retailers should consider expanding into Miami, as the city offers a prime location for growth and expansion.
Do your research, stay diligent, and happy investing.
Methodology
All figures presented in this article are based on MyEListing.com’s commercial real estate listing data in corroboration with other freely available data and information covering the commercial real estate industry.
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