While vacancy in the community-neighborhood shopping center space market has shown little movement over the past couple of years, the rate is relatively low. The second-quarter number was 7.2%, down 50 basis points for the period, up 10 year-over-year, and up 50 over two years. No additional change followed in July. The second-quarter national community-neighborhood shopping sector rate, for the sake of comparison, was 10.8%. Following a 25,000-square-foot loss in the first quarter, net absorption in this sector leapt to 172,000 square feet the quarter following, well in excess of the 57,200 square feet that completed during the period, all in the 18Biscayne neighborhood center, which delivered in May at 1776 Biscayne Boulevard. July followed with the delivery of 31,000 square feet of retail at the Purdy Avenue Garage & Retail mixed-use project. At $24.25 psf and $20.70 psf, second-quarter asking and effective average community-neighborhood shopping center rents were up 0.4% and 0.5% for the period, following the first quarter’s smaller gains. Each rate lost one cent in July amid 1,000 square feet of positive net absorption.
A few projects, meanwhile, remained under construction per the date of this report. The 88,000-square-foot Palmetto Gardens community center is scheduled to complete this September at 37th Avenue and Palmetto Expressway in Opa-Locka. A 102,000-square-foot expansion of the Dadeland Mall regional center got under way in July and will finish in May 2013. June saw the start of the 530,000-square-foot retail component of the Brickell CitiCentre mixed-use development (see the Office space section). In addition, a December groundbreaking is scheduled for the 235,000-square-foot Fontainebleau Park community center at W. Flagler Street and S.W. 92nd Avenue in the West Dade submarket. The completion date was not specified.
The power center sector has been relatively quiet. The latest completion of this type was the March 2011 finish of the 400,000-square-foot Palms at Town & Country in Kendall. Only one power center project, the 409,800-square-foot Shops at Beacon Lakes, appears on Reis’ list of planned and proposed retail developments. A construction schedule was not specified. Second-quarter power center vacancy was 5.6%, down from 5.9% and 6.7% a quarter and a year earlier and below the 6.3% national power center rate. At $33.32 psf, the second-quarter average asking lease rate for non-anchor power center space was up 1.1% for the quarter but was up just 0.2% year-over-year.
Slow downward movement in community-neighborhood shopping center vacancy is expected for the period ahead as rates of rent growth increase, slowly but steadily. Construction activity should accelerate gradually. Cushman & Wakefield cites a strong tourism sector, growing infrastructure, and “robust local and foreign consumer demand” as assets for the retail market.