Retail leasing and investor markets in Florida remain as scorching as a Miami sidewalk amid low statewide vacancy rates, which no doubt be a will hot topic as industry peers head to ICSC@FLORIDA at the Orange County Convention Center in Orlando Aug. 25 to 27.

At midyear, the Miami metropolitan statistical area enjoyed the fifth-lowest retail vacancy rate of all U.S. major markets, at 2.8%, compared with a national 4.2% rate, according to CoStar. Tampa-St. Petersburg was close behind at 3% and Orlando market at 3.4%. This portends another tight retail leasing market for the rest of 2024 into 2025, as higher building costs and strict lending requirements persist, CoStar said. While new Florida retail construction has been stymied by high costs and interest rates, there’s some emerging hope, according to CBRE. In its Midyear Global Real Estate Market Outlook 2024, CBRE said it expects the Fed to finally cut rates in September and again in December, followed by four more likely cuts in 2025.

If You Can’t Build, Buy

For now, with no significant retail construction underway, investors and developers are finding market upside in center purchases.

Dundas Real Estate Investments bought Orlando’s 74.2-acre Lee Vista Promenade for $68.5 million from Site Centers this month. Tenants at the 314,000-square-foot facility include Academy Sports + Outdoors, Epic Theatres, Ross Dress for Less, HomeGoods, Michaels and Ulta Beauty. Restaurants like Outback Steakhouse and Moe’s Southwest Grill average $600 in sales per square foot there, Colliers said.

Edens added to its expanding Florida portfolio with its late-2023 purchase of the 254,943-square-foot Shadowood Square in fast-growing West Boca Raton for $88 million. “We look forward to revitalizing and transforming this corner of West Boca in a way that resonates with the local community,” said Edens managing director Nicole Shiman. The center is blocks from 1,000 high-end homes expected to deliver by 2026, the firm said. Edens now has 11 retail properties in the Miami area.

Publix, has purchased a Coral Springs retail center that it anchors. In May, Publix bought the 157,914-square-foot Ramblewood Square for $58.5 million from private equity giant Apollo, according to Connect CRE. Before that, the center traded for $21 million in 2019, prior to renovations. Publix previously bought two centers it occupies in Jacksonville and in Broward County.

Grocer Aldi also is expanding in Florida and starting to convert part of its Winn-Dixie portfolio in Panama City, Deltona, Pensacola and Lakeland, it said.

In another sale, CTO bought the 318,000-square-foot Marketplace at Seminole Towne Center on 41 acres in Sanford for just over $68 million from Kohan Retail Investment Group. Burlington, Marshalls, Ross and Old Navy are among the tenants there. The new owner wants to attract a grocer, gym, restaurants and possibly housing either to the center or to 13 acres it owns across the street, according to ClickOrlando.com.

Big Developments and Reinventions Are on the Horizon

There are even bigger doings in Florida’s entertainment world. After June’s municipal approval of a $17 billion-dollar development plan, a fifth park at Disney World is rumored to be on the way. Orlando-area retail owners “can expect this trend of consistent growth to continue for years,” Matthews Real Estate Investment Services noted in its midyear 2024 Central Florida Retail Market Report, out this week.

The Magic also have something up their sleeves. The Orlando NBA team plans a $500 million mixed-use hub called Westcourt adjacent to their Kia Center home. JMA and Machete Group are partnering with the Magic on the 900,000-square-foot project, which is expected to include 120,000 square feet of retail; an 11-story, 261-room Kimpton hotel, 273 apartments, a chef-driven restaurant, a live event center, the Magic’s corporate headquarters and a block of Class A office. Construction is set to begin in early 2025 and deliver by early 2027, said David Barilla, executive director of the Orlando Downtown Development Board and Community Redevelopment Agency and a speaker at this year’s ICSC@FLORIDA.

On the west side of Orlando’s downtown, 68 acres are being transformed into a transit-oriented, urban-infill education center called Creative Village, a $2 billion public-private partnership. “It’s creating a higher-education hub for 8,000 students, faculty and staff,” said Barilla. Valencia College and University of Central Florida both have downtown campuses in the completed Phase 1. Valencia’s campus houses the Walt Disney World Center for Culinary Arts and Hospitality. “There’s a mixology lab there dedicated to the craft cocktail industry,” he said. Electronic Arts has relocated its Maitland studios to Creative Village, bringing 1,000 jobs to downtown. Phase 2 is underway with office, hotel, apartments and mixed-income and student housing.

Also underway downtown is The Canopy. Construction on the urban gathering space under Interstate 4 is set to begin in early 2025, said Barilla.

An old resort also is getting a second look. Shuttered in 2019, Fort Lauderdale’s classic Pier Sixty-Six Resort along the Intracoastal Waterway is slated to reopen by mid-November. The 32-acre property, built in the mid-1960s, will return with 325 guest rooms and high-end amenities, including a 15,000-square-foot spa, a multilevel pool, a snow room and a dozen restaurants, according to Connect CRE. The resort’s iconic 17th-floor rotating lounge also will be restored, along with a 13,000-square-foot marina featuring 164 deepwater slips for yachts up to 400 feet long. Tavistock Development Co. is leading the $1 billion redevelopment. Meanwhile, Oracle co-founder Larry Ellison has acquired the 309-room Eau Palm Beach Resort & Spa from Lewis Trust Group. The eight-acre hotel features seaside swimming pools, a 42,000-square-foot spa, 32,000 square feet of meeting space and restaurants.

Related’s master-planned Riverwalk District promises to alter Tampa’s waterfront in the next few years with two residence towers and abundant mixed-use spaces. Expected to yield 1.7 million square feet, including more than 1,000 dwellings, the district will span six acres along the Hillsborough River that Related bought in 2022 for $55.5 million. The development also is expected to feature 33,000 square feet of commercial/retail space, a new trail, boat slips, a heliport and an amphitheater, according to Related. The developer will inject about $1 billion into the site and has started sitework but has yet to disclose a construction timeline.

A Few Box Stores and Lots of Restaurants

In the first half of 2024, average retail market asking rents were $65.35 in Miami, $48.93 in Fort Lauderdale and $48.88 in Palm Beach, according to Colliers.

While the big-box era is fading, there are still some sizable Florida stores in the works. The Restaurant Store opened its first Florida store this summer in 67,000 square feet in Orlando’s Sand Lake Corners South off Florida’s Turnpike. It’s the foodservice equipment and supplier’s 12th store nationally.

In Daytona Beach, next to Buc-ee’s on Gateway North Drive, Floor & Decor plans to build a 64,122-square-foot store on seven acres, The Daytona Beach News-Journal reported, citing plans filed with the city. In 2022, the retailer opened a location in the Miami Design District, and it opened a location in West Palm Beach on July 25, 2024.

Quick-service restaurants are expanding voraciously in Florida. Portillo’s, known for its take on Chicago street food, is growing its Florida footprint with plans to open in Orlando’s Waterford Lakes Town Center by year-end 2024. Portillo’s has locations in Brandon, Clermont, Kissimmee, St. Petersburg and Tampa. Cook Out — known for barbecue, burgers and shakes — has bought two properties in the Tampa area for its Florida debut. And Fatburger opened its first Central Florida location, in the Orlando suburb of Celebration. It’s the chain’s second in the state, following Riverview, near Tampa. Also expanding are Potbelly, which has only four Florida locations after its first Orlando store debuted in January, and Dutch Bros Coffee, which opened its third Florida locale in May in Winter Park. Jack in the Box said in June it plans as many as 20 locations in the Orlando market. Raising Cane’s has filed plans to open its first St. Petersburg restaurant, in Tyrone Square mall, according to St. Pete Rising. It will be the franchise’s third Tampa Bay location. Raising Cane’s will add a location at 100 S. Semoran Blvd. in Winter Park on Sept. 12, according to its website.

Toothy travel center giant Buc-ee’s will open a 74,000-square-foot store off Interstate 75 in Ocala, likely in 2026, reported Fox 35. The retailer has proposed another site, off Interstate 95 in Fort Pierce. In June, Wawa opened its first Florida standalone drive-thru store, in Largo, about five miles southeast of Clearwater. It’s Wawa’s third drive-thru in the U.S.

The 84-year-old Friendly’s chain, known for its ice cream and burgers, opened its third Florida restaurant in June, near Disney Springs.

Fine-dining venues also are opening in droves. Summer House on the Lake has opened in Disney Springs, and Ômo by Jônt has opened in Winter Park. It accommodates 16 and offers a tasting menu crafted by chef Ryan Ratino of the two-Michelin-starred D.C. haunt Jônt. Guests are ushered through three separate rooms to feast on 18 to 22 courses of French-Japanese creations.

Among high-profile eateries debuting in Miami are the pasta-focused Otto & Pepe in Wynwood, which opened this month. Headed by Michelin-starred chef Viviana Varese, it includes Miami’s first pasta bar, noted Eater Miami. The new La Martola in Buena Vista offers the flavors of the Italian, French and Spanish rivieras, including grilled turbot. New York City’s popular French-inspired cafe and bakery Maman has debuted its Florida flagship in Wynwood with guava-filled croissants and Oprah-endorsed cookies, according to Eater. The first U.S. location of the internationally popular Yann Couvreur Cafe also has opened in Wynwood, featuring dishes like smoked salmon and lemon cream cheese on toasted multigrain sourdough bread, according to Eater.