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Retail Finding a New Home in South Florida

CoStar Market Insights: Over 15% of New Retail Construction in Downtown Miami is Occurring in Multifamily Buildings
May 16, 2018

The Bradley in Wynwood is just one of the latest examples of developers incorporating mixed-use trends in residential buildings.

One out of every 10 new multifamily developments throughout South Florida is now incorporating at least some retail space into its design.

While this is also common in condominium and office developments, the trend of incorporating retail, and even small amounts of office space, in residential developments seems to be increasing in the market.

In the Downtown Miami submarket specifically, 180,000 square feet, or approximately 17 percent of the new retail space underway, is within a multifamily building.

This may be because most new projects are rising in the urban core and other walkable areas of downtown. And mid-rise buildings are more conducive to retail elements, which increases walkability as well.

For example, in the Miami metro, more than half of new developments over the past five years have been either mid-rise or high-rise buildings. This is much more than last cycle, when almost 80 percent of new developments were garden-style properties.

Midtown5 at 3201 NE 1st Ave.

A prominent example is MidTown 5 in Midtown Miami. The 24-story, 400-unit building delivered in January 2017 and incorporates more than 22,000 square feet of ground-floor retail space.

So far, a nail salon, a pizza restaurant and a privately-owned gym have taken space in the building. These restaurants and personal-service tenants add to an extension of an already-robust amenities package for those renting the apartments above.

There are about five projects underway that will feature retail components in Miami, according to CoStar data. In total, there will be 3,500 apartment units at these mixed-use projects, which is 12 percent of all inventory underway.

Art Plaza broke ground this January, and the 34-story tower is expected to have up to 20,000 square feet of retail when completed.

Wynwood 25, the multifamily portion of the office annex of the same name, is expected to have 31,000 square feet of retail when completed in early 2019. According to the developer’s website, the community is targeting creative types and millennials who desire walkability.

The biggest advantage to building retail components in apartment buildings is a live / work / play vibe that can be appealing to millennials and down-sizing baby boomers alike, while simultaneously creating a captive audience of shoppers and clients for tenants, and their landlords.

With more mid-rise and high-rise developments in the pipeline, the trend is likely to continue, with retailers increasingly benefiting from more and more customer proximity.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.

Pamela Stergios, market analyst covering the South Florida market.

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