Miami High-Street Retail Holds Value Amid High Availability, Long-Term Suburban Rent Growth

Retail in Miami’s urban high-street districts commands higher rents despite high availability and consistent rent growth among their suburban counterparts, according to a recent report from CBRE.

Miami’s high-street retail rents remained elevated, driven by scarce supply and experience- and tourism-fueled demand. In the fourth quarter of 2024, the market’s high-street rent was $71.89 while the rent for dense suburban markets was $43.53. Miami’s elevated rents aligned with the 10 major US cities analyzed in the report. Across all markets, New York commanded the greatest premium (12 times larger) while San Francisco commanded the smallest (28% larger).

While high-street districts have higher rents, many also have higher availability than dense suburbs, driven by hybrid work schedules that reduced downtown foot traffic and left retail unoccupied. In eight of the 10 markets, high-street availability exceeds suburban availability in the fourth quarter. In Miami, high-street availability is 7 percentage points higher than suburban availability. The largest gaps are in New York City (15.36 percentage points) and Washington, D.C. (10.66).

Despite this, Miami’s high streets have a five-year rent gain of 3.9%, ahead of Dallas (3%), Los Angeles (2.8%), and Philadelphia (2.6%). These cities stand in contrast to the remaining six where suburban retail rent growth outpaces downtown rent growth. Those with the widest gaps in rent growth over the past five years include New York (2.1% growth in dense suburbs vs. 0.7% growth in downtown high streets), Boston (2.1% vs. 1.4%) and Denver (2% vs. 1.5%).

Miami’s high-street rents remain elevated amid relatively high suburban rent growth of 3.3% in the past five years. The region’s landlocked geography inhibits new development – which generally keeps average rents, rent growth and occupancy in check – leaving its suburban markets under-retailed with healthier fundamentals compared to suburban markets in the rest of the country.

“Miami’s high-street rent premium is impressive given the strength of its suburban markets. Despite high availability, the scarcity of high-street districts in Miami has left them in demand – though some more than others right now. In the long-term, Miami’s most mature high streets have a rosy outlook,” said Drew Schaul, an Executive Vice President with CBRE in Miami. “At the same time, suburban markets are seeing historic highs in rent growth and occupancy. The extremely limited amount of new suburban development in the pipeline compared to years past will ensure this for the foreseeable future.”

Live-work-play (LWP) districts that combine retail with residential and office are outperforming the broader market. However, in markets like Miami, rent growth and availability for these districts diverge sharply from high-streets and suburban markets, with relatively low asking rents averaging $33.80 and availability at 11.3%.

“Rents from amenity-driven retail spaces on the ground floor of multi-use buildings are generally dictated by use. Certain retailers, like hair salons, can only serve so many clients within certain operating hours. This caps their revenue and, in turn, the amount of rent they can pay,” said Schaul. “Restaurants, and especially those in a high-street setting, are the exception to this rent limitation since they can generate higher sales revenue.”