Miami’s Version of Fifth Avenue and Rodeo Drive Changes Along With Suburban Malls

A sports store with custom-built bleachers for watch parties. A nap room disguised as a mattress store. A gourmet Popsicle shop featuring ingredients from around the globe. These are just some of the newest tenants at Lincoln Road, a seaside, milelong pedestrian corridor in Miami Beach, Florida, that ranks with New York’s Fifth Avenue and California’s Rodeo Drive as one of the nation’s toniest shopping districts and a lure for high-end tourists.

More than $80 million in improvements are underway at Lincoln Road as traditional stores are being replaced with smaller concepts that offer customers experiences they can’t get on their iPhones or computers. While that concept has been playing out in sprawling suburban malls that need to fill vast amounts of space in recent years, the Lincoln Road redevelopment shows that small luxury enclaves are also looking to increase foot traffic with a different type of retail tenant. It used to be that national clothing retailers sold rows of shirts and jeans in big flagship stores, but “that’s yesterday’s notion,” said Michael Comras, a longtime Miami leasing agent and one of dozens of property owners on Lincoln Road. Given that so many people prefer to buy clothes online, brick-and-mortar retailers should be seeking smaller footprints, stocking the stores with more specialty items and holding public events to draw people in, brokers said.

Brandy Melville, a 2,500-squarefoot clothing retailer with a cult-like following among teenage girls, opened at 730 Lincoln Road this month. While many consumers remain glued to their phones, patrons ultimately want and need to be near other people, Comras explained. “The nature of retailing is changing because of the efficiency of the world,” he said in an interview. “But we are all about socialization.” Lincoln Road attracts 11 million visitors a year with its fountains, gardens and Art Deco store facades. It ranked as the fifth most expensive retail street in the nation, with an average rent of $450 per square foot, according to Cushman & Wakefield’s 2018 Main Streets Across the World report. Rodeo Drive in Beverly Hills, California, was second at $875 per square foot, well behind No. 1, Fifth Avenue in New York, where tenants pay a hefty $2,250 per square foot of prime retail space. Lincoln Road has a distinct advantage in that it’s a two-minute walk from the Atlantic Ocean, giving the development consistent access to visitors and locals, according to Jonathan Carter, executive managing director for retail services at Colliers International in Miami. “Lincoln Road is where the tourists are staying because of the sand,” Carter said. “For every other mall, you’re driving a ways.”

Rising Rents

Lincoln Road rose to prominence in the 1990s as a destination for local retailers, restaurants and art galleries. As the corridor became more popular, rents quadrupled, becoming too expensive for the independent tenants, which eventually were replaced by national names such as Nike, Apple and H&M.

The Lincoln Road locals moved west into Miami for cheaper rents and started drawing crowds to once-rundown neighborhoods such as the Wynwood arts district. In recent years, Lincoln Road has lost momentum, with landlords agreeing to short-term and pop-up deals just to fill space, brokers said. A representative for the Lincoln Road Business Improvement District said it’s difficult to determine an overall occupancy for the 1 million-square-foot shopping district because individual landlords cut their own deals. But brokers said vacancies have been caused by a variety of problems, including the broad-based problem of more shoppers buying online instead of in stores and local challenges such as construction at the nearby Miami Beach Convention Center for an expansion and renovation. Also hurting the street was the outbreak of the mosquito-borne Zika virus in South Florida in 2017.

Meanwhile, the Miami Beach City Commission has approved a plan to spend $67 million to refurbish the road with new walkways, landscaping, lighting and signs, while the individual landowners have agreed to spend $16 million for arts and cultural activities. James Corner Field Operations, a landscape architect and urban designer, is working on the project. Lincoln Road and other retail developments, long considered prime spots for dry goods and soft goods retailers, are attracting more food and beverage tenants, as well as health, beauty and fitness concepts, explained Dave Preston, another Colliers retail executive in South Florida. The roster of new tenants includes Pele Soccer, owned by Brazilian soccer star Pele, for its second U.S. store at 810 Lincoln Road. The 7,000-square-foot location has a special turf floor and will install bleachers to attract fans to soccer watch parties. Another newcomer is Casper at 1114 Lincoln Road.

It bills itself as a one-stop-shop for sleep related items and allows customers to take a nap in the store in a private space. MILA, a “MediterrAsian” restaurant and lounge, is expected to open at 800 Lincoln Road this fall, while Paletas Morelia, a Brazilian brand selling gourmet popsicles, is set to debut there later this year.

Eventually, the new tenants and planned improvements are expected to give the street new life, according to Preston. “We think it’s poised to return to power,” he said. “The good news is, people are still there and spending money. It’s just a matter of finding out what they want to spend their money on.”

Source: CoStar
Photo: Lincoln Road BID