TERRANOVA www.terranovacorp.com | 305.695.8700 801 Arthur Godfrey Road, Suite 600 Miami Beach, FL 33140 BY THE NUMBERS LINCOLN ROAD - Between Alton Road and Washington Ave. 525,477 sf 6.2% $203.34 of AVERAGE VACANCY RATE Inventory ASKING NET RENT COLLINS AVENUE - Between 5th Street and 10th Street 201,297 sf 4.3% $88.56 of AVERAGE VACANCY RATE Inventory ASKING NET RENT OCEAN DRIVE - Between 5th Street and 15th Street. 165,768 sf $97.53 of 3.0% VACANCY RATE AVERAGE Inventory ASKING NET RENT MIRACLE MILE - Between Le Jeune Rd. and Douglas Rd. 440,886 sf $44.60 of 6.2% VACANCY RATE AVERAGE Inventory ASKING NET RENT LAS OLAS BOULEVARD - Between SE 6th Ave. to SE 16th Ave. 367,803 sf 5.3% $36.17 of AVERAGE VACANCY RATE Inventory ASKING NET RENT CLEMATIS STREET - Between Olive Ave. and Quadrille Blvd. 329,086 sf $23.22 of 12.2% VACANCY RATE AVERAGE Inventory ASKING NET RENT WORTH AVENUE - Between Ocean Blvd. and Coconut Row 319,387 sf $75.61 of 2.4% AVERAGE VACANCY RATE Inventory ASKING NET RENT FLAGLER STREET - Between Biscayne Blvd. and NW First Ave. 372,541 sf $29.25 of 10.1% VACANCY RATE AVERAGE Inventory ASKING NET RENT SOUTH MIAMI - Between US-1 and SW 57th Ave. 244,082 sf 0% N/A of AVERAGE Inventory VACANCY RATE ASKING NET RENT TAKING TO THE STREET: URBAN RETAILSCAPE IN SOUTH FLORIDA Occupancy and asking rents have renovation and revival, compared to kept an upward trend in South the other streets. Florida’s retail streets, with Lincoln Road continuing to exceed in rental Worth Avenue continues to levels. New energy is apparent in rank as the top high-end shopping all South Florida retail streets, destination street in South Florida, from posh Worth Avenue in Palm packing upscale designer-name Beach to gritty Flagler Street in stores corner to corner like no other downtown Miami, two streets newly street. Its stores serve its immediate included in this annual report, surroundings in the affluent Town and which illustrate the challenges of Palm Beach as well as visitors and conquests at the two extremes who seek it out as a luxury shopping of the urban street experience. destination. As such, it isn’t Avg. Avg. Vacancy Vacancy Percent Retail Street Asking Asking Rate Rate Change Rent 2012 Rent 2011 2012 2011 Lincoln Road $203.34 $151.40 34.3% 6.2% 4.0% Las Olas Blvd $36.17 $29.15 24.1% 5.3% 10.2% Miracle Mile $44.60 $39.04 14.2% 6.2% 6.6% Clematis Street $23.06 $22.88 0.8% 12.2% 14.3% Ocean Drive $ 97. 53 3.0% Collins Avenue $88.56 4.3% Worth Avenue $75.61 2.4% Flagler Street $29.25 10.1% Sunset Drive N/A** 0.0% * Streets without 2011 figures were introduced in report this year ** No available space fronting Sunset Drive Flagler Street is shedding its surprising that it exceeds rents rundown image slowly but surely, and occupancy when compared to as the entire downtown Miami area shopping centers in the submarket undergoes a major residential and where it happens to be located. commercial renaissance, including However, it doesn’t command the the addition of thousands of new highest rents among South Florida condo units, hundreds of hotel rooms retail streets. One challenge for and new high-profile office towers. Worth Avenue is that population is Flagler Street’s 10% vacancy, much decreasing in its immediate trade higher than the 2.7% of shopping area, the Town of Palm Beach. centers in its submarket, reflects Further, other venues in South the street’s much earlier stage of Florida, such as Aventura Mall and Village of Merrick Park, are asking rents. increasing the presence of high-end store. Ocean Drive and Collins Avenue, two other Miami Beach retail streets Sunset Drive in the city of South that bring retail to sidewalk level, Miami is another new entry in this rank second and third on asking report. Sunset Drive has long been rents, behind Lincoln Road. These a stroll-and-shop street favored two streets also capitalize on Miami by nearby locals, but its appeal has Beach’s profile as an entertainment gained fresh momentum due to new, and cultural destinations. Locals modern restaurants that draw a as much as tourists enjoy the buzzing nighttime crowd, especially restaurants along Ocean Drive, while on weekend nights. Its zero Collins Avenue, like Lincoln Road, availability reflects a relatively small is a showcase for retailers to expose inventory, long-standing leases still their brands to visiting tourists from in effect, and aggressive leasing by around the world. its landlords. Las Olas Boulevard exhibits Lincoln Road in Miami Beach noticeably higher occupancy and continues on an upswing. Two asking rents in 2012, showing a new high-profile additions are new strong recovery from the previous flagship stores for fashion retailers year, which had seen increasing Forever 21 and H&M, two of the vacancy and dropping rents. Las most successful store chains to Olas also is showing strength in rents emerge in the fashion industry in and occupancy when compared to recent years. H&M is building its shopping centers in its submarket store on the former Lincoln Theater and its county. Landlords have added site, whose main tenant New World many new tenants to the street’s Symphony relocated to a new, state- staple of unique and local merchants, of-the-art facility one block north of increasing Las Olas’ appeal to the Lincoln Road. many tourists who make it a sure stop, as well as to locals who favor it Indeed, the character and appeal for business and nighttime dining. of Lincoln Road is spilling over to its surrounding streets, spurring Miracle Mile is showing slightly redevelopment and renovations that higher vacancy rates than shopping will accommodate many retailers and centers in its submarket, an restaurants unable to find suitable indication of the tilting balance space and rents on Lincoln Road. between occupancy and rents at any Lincoln’s vacancy rate has gone up, given time. However, Miracle Mile compared to last year, which might continued an upward trend in rents be a temporary situation or a new when compared to itself last year, vacancy norm for the current level while its vacancy remained virtually of asking rent. Lincoln Road’s ample flat. The single-digit vacancy rate and outdoor seating space contributes to the growing popularity of many of its its higher rents, as landlords figure new eating establishments suggest it the sales from that space into their can sustain the higher rents. Rent and Vacancy in Street Retail Space vs. Shopping Center Space Avgerage Average Vacancy Vacancy Retail Area Asking Retail Area Asking Rate Rate Rent Rent Lincoln Road $203.34 6.2% Miracle Mile $44.60 6.2% Ocean Drive $ 97. 53 3.0% Sunset Drive N/A 0.0% Collins Avenue $88.56 4.3% Flagler Street $29.25 10.1% South Miami Miami Beach Submarket Submarket $25.37 5.5% $35.08 2.7% Shopping Shopping Centers Centers Miami-Dade Miami Dade County County Shopping $25.79 5.5% $25.79 5.5% Shopping Centers Centers Clematis $23.22 12.2% Las Olas Street $36.17 5.3% Boulevard Worth $75.61 2.4% Avenue West Palm Dania/So. Fort Beach Lauderdale $24.61 5.1% Submarket $19.57 14.0% Submarket Shopping Centers Palm Beach Broward County County $20.74 11.7% $21.10 13.0% Shopping Centers Shopping Centers South Florida Retail Streets Snapshot Avg. Total Number Vacancy Retail Street Asking Inventory of Rate Rent 2012 (sq ft) Blocks Lincoln Road, Miami Beach $203.34 6.2% 525,477 15 Ocean Drive, Miami Beach $ 97. 53 3.0% 165,768 10 Collins Avenue, Miami Beach $88.56 4.3% 201,297 10 Worth Avenue, Palm Beach $75.61 2.4% 319,387 6 Miracle Mile, Coral Gables $44.60 6.2% 440,886 8 Las Olas Boulevard, Ft Lauderdale $36.17 5.3% 367,8 0 3 13 Flagler Street, Miami $29.25 10.1% 372,541 11 Clematis Street, West Palm Beach $23.06 12.2% 329,086 7 Sunset Drive, South Miami N/A* 0.0% 244,082 7 *No ground retail space available Clematis Street improved its building inconsistency in upkeep and occupancy slightly and is raising its appearance. But local governments profile with the addition of several for years now have recognized and new popular establishments, such embraced the value and appeal of as Duffy’s Sports Bar and Five Guys original retail street destinations, Burger and Fries. Clematis Street is investing resources to enhance faring slightly better in occupancy and renew their attractiveness to than its submarket and its county, shoppers, tenants and investors. with a higher average rent than both, reflecting the underlying strength More retailers are getting over of many of its tenants, particularly the unorthodox store layouts restaurants old and new where found in street buildings, as they lunch crowds are a staple. It is an perceive the market opportunities encouraging trend for Clematis, a in street locations, which are the recognized nighttime spot that in original mixed-use, live-work-play recent years has diversified its profile settings now emulated by many and broadened its appeal with the new developments. Retail street addition of a government building landlords face the challenge of that contains a public library and a balancing the need for financially modern café and photography shop. strong, national tenants that are able to afford rising rents, with the appeal South Florida’s retail streets keep of unique local tenants that give the increasing in popularity as they street a homegrown, local character.