Hotels & Retail Rock!
South Florida hotels and retail have more than just recovered from hard times—they're reinventing themselves to satisfy a world-class clientele, according to our panelists at Bisnow's South Florida Retail & Hospitality Summit on Tuesday. (That means adapting to the times, like MySpace or Madonna.)
That means visitors and natives alike expect more from Miami's shops and hotels, according to panelists. Only 10 years ago, it was enough for hotels to offer access to the beach and luxury shops to offer standard luxurious goods. Now consumer tastes are turning toward the experiential and unique, and savvy hoteliers and retails know it. Sometimes it's little things: one panelist says he recently discovered that guests really like that cold press juicer in the lobby. (Juice diets are hot right now; that machine is practically a restaurant by itself.) More than 120 real estate pros came to the InterContinental Miami to hear our two panels, one on retail, the other hospitality.
Snapped: CBRE managing director of South Florida Ken Krasnow and Goldman Properties CEO Jessica Goldman Srebnick. Miami’s retail has matured in recent years. For a long time, Bal Harbour met the need for luxury retail, but more recently, there’s been a proven appetite for more—unique new retailers popping up in Design District prove that. Both luxury and non-luxury retail aren’t at much risk of overbuilding, according to the panel, because of large net in-migration, many from other countries, into Miami-Dade but also Broward. (Isn't one of Newton's Laws of Physics that people always need stuff?)
Above are Ackman-Ziff principal Robert Kaplan, who moderated, Stiles chief development officer Bob Breslau, and Dacra COO Steve Gretenstein. In fact, you could argue that greater Miami is under-retailed, a 42M SF market—15 SF per person (about a phone booth's worth, if there were still phone booths)—with only 4% vacancy. The problem for retail developers wanting to meet that demand is land. Sites are scarce, especially as residential developers compete for land, and are often willing to pay more than top dollar. That means that retail is essentially an infill game in South Florida now.
Fortunately, there are infill opportunities, especially in the burgeoning (and definitely unique) Design District, Midtown, and Wynwood. Each has its own personality, and they mesh together. There’s room for luxury retail in the Design District, more mass retail-fast casual in Midtown, and retail driven by creative energies in Wynwood. But these aren’t the only places in South Florida that are beckoning retailers. West Broward, for instance, has surprisingly strong demographics, and not enough retail. (Even the Girl Scouts are cleaning up there.)
Here are Menin Hospitality CEO Keith Menin, Advancit Real Estate Investments managing partner Tony Cummings, and ADD Inc director-Miami office Jonathan Cardello, who also moderated. South Florida’s hospitality market fundamentals are strong and getting stronger, our hospitality panel says. Occupancy is high, RevPAR is healthy, and there are high barriers to entry for new product. Not only that, traditional demand from the Northeast during the winter is being supplemented by demand from European and South American visitors, as well as growing convention business during the rest of the year.
Snapped: Hilton Worldwide president-Americas Joe Burger and KNR managing partner Karim Masri. Hotels need to be about energy, experience, and feeling a part of a unique location—guests need to feel that sense of place (besides experiencing primo service, food to die for, and no shortage of cocktail umbrellas). Though new development is difficult, places such as Wynwood—which is unlike anywhere else—will see new properties in the near future, and the unique hotel stock in Miami Beach remains as competitive as ever.