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Giralda Avenue between Ponce de Leon and Galiano Street
The stars are out... and so are the restaurants. On the ďŹ rst Friday of every month, Downtown Coral Gables’ Restaurant Row will be bustling with al fresco dining, art and live entertainment. Join us for an unforgettable evening that puts a twist on dining out.
#GiraldaUnderTheStars shopcoralgables 2
TERRANOVA ShopCoralGables.com
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BUILDING SUCCESS
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Miami's Restaurants are Bringing New Flair to the Farm-to-Table Dining Movement
America's Immigrants, Todays Entrepreneurs
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Stephen H. Bittel, planned on being a lawyer in his hometown. Instead, he’s reshaping it
made in miami
miami beach -a market on the move Miami Beach continues to make a strong claim as one of South Florida’s most influential economic drivers. TRENDS
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editor’s note
Miami Beach has long since been a coveted travel destination luring visitors with its shopping, illustrious night life, and world renowned beaches; but visitors aren’t the only ones feeling the pull to SoBe. Premier shopping destinations like Lincoln Road, Ocean Drive and Collins Avenue are prime locations for retailers looking to make their mark on South Florida. The prominence of Miami’s diversity and strong market has initiated a trend of Made in Miami companies run by entrepreneurs who immigrated to try their hand at running a business in the United States. Miami’s cultural fabric has been heavily influenced by a foreign-born population that has made it one of the most ethnic places in the world, allowing these companies to succeed and grow.
But why Miami Beach? In our Miami Beach market research report, we explore the international draw for these coveted commercial real estate properties, causes of the increasing rental rates, potential exposure for national and international brands, and several other important variables considered when looking for space in iconic Miami Beach. This is all information we believe is relevant to our continuously evolving industry, and are happy to share with you. For more information and future announcements check out our newly designed and relaunched website at www.terranovacorp.com or contact us at leasing@terranovacorp.com to be added to our mailing list.
Chairman/Publisher Stephen H. Bittel executive Vice President / Editor-in-Chief Mindy McIlroy managing Editor Rebecca DeVille Graphic Designer Michael Dorer Contributing writers Patricia Guarch Wise Andrea Speedy
publisher Terranova Corporation
advertisers Cherry Blow Dry Bar Giralda Under the Stars Goorin Bros. Lincoln Lane Eatery O Bag Palm Plaza Suniland Shopping Center Tumi
Terranova Corporation 801 Arthur Godfrey Road, Suite 600 Miami Beach, Florida 33140 305.695.8700 leasing@terranovacorp.com
Mindy McIlroy
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W E’ VE ARRI VED LOCATED AT 832 LINCOLN ROAD
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building Success Terranova Corp. chairman STEPHEN H. BITTEL, J.D. ’82, a Miami native, planned on being a lawyer in his hometown. Instead, he’s reshaping it. By Carlos Harrison Article courtesy of MIAMI LAW magazine
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building success
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“ always thought I was going to be a lawyer because
my grandfather was, and my dad was, and my dad and I were and remain very close,” Bittel said. “My dad taught at the law school. He was a professor there while I was in law school. I even took his real estate investment planning class. The grade was pre-negotiated in advance. To get permission from the dean to take the class we had to pre-agree I was getting a C.” Before that, though, Bittel headed far north, to Bowdoin College, a liberal arts college nearly as old as the nation, in Brunswick, Maine. Its graduates include Henry Wadsworth Longfellow and Nathaniel Hawthorne, human sexuality researcher Alfred Kinsey and North Pole explorer Robert Peary, among others. After college, he spent a year in Europe on a Watson Fellowship, working on a research project aimed at understanding “the motivations behind European investments in the United States.” It took him to the Netherlands, Germany, France, Switzerland, and Italy to meet with private bankers and investors, and it led him away from the law.
the law school so I could walk. I got engaged in March of my first year. We were married during spring break of my second year. Terranova was started in the fall of my second year. I graduated with seven employees.” The company started out focusing on strip plazas, beginning with two small shopping centers on Sunset Drive. The passion for retail centers continued from there, with properties including Biscayne Plaza, Suniland, Kendall Mall, and Flagler Park Plaza in Miami-Dade; Westfork Plaza, Paraiso Plaza, Country Walk, Weston Lakes, and Sheridan Mall in Broward; and Boca Valley Plaza, Shadowwood Square, and Jupiter Square in Palm Beach County. “Clearly,” he said, “the study of law has enabled our company to have a more acute risk management strategy, where we try to be cognizant of what the pitfalls in every transaction are, to either try to insure that risk or manage around them.”
“Clearly, the study of law has enabled our company to have a more acute risk management strategy”
So, even though he never intended to practice law, he said, his knowledge of the law helped substantially.
“The language that businessmen use to communicate with each other in transactions of size are heavily driven by attorneys who speak in their own special language,” Bittel said. “And my ability to understand that language has enabled me to crash through a lot of legal mumbojumbo to get to the essence of the transaction.
-Stephen H. Bittel, Chairman & Founder, Terranova Corp.
“Really my whole life I always presumed that I was going to be a lawyer in practice and eventually practice with my dad. And that year in Europe I really came to the conclusion that I didn’t want to practice law.” His direction took more shape as he recalled the conversations among his parents’ friends he had listened to growing up. “I remember so many times at the dinner table,” he said, “my parents would have friends over—lawyers or professors or doctors—and they all talked lovingly about their real estate investments. And I always thought if that is where they made their real money then they would do so much better if they did it full time instead of as a hobby. “So I started law school never intending to practice,” he said. And he dove into what would become his career even as he started his studies at Miami Law, working full time in commercial real estate, and then leaving that company to start his own.
“It also has made me not view litigation fearfully, as most businesses do.” As suburban areas became built out, and younger families moved to the urban core, Terranova moved with them. They began with an eight-building group on Miracle Mile that it still owns. Now he’s turning his sights to transforming Lincoln Road. “We knocked down our first building on Lincoln Lane and Meridian,” he said. “And we’ve already received historic board approval to do the same thing on the west side of Meridian, also on Lincoln Lane—knock down a single-story building, come back with three stories. So these are real development opportunities to add special new projects to that area and expand Lincoln Road from a single street to a whole district— from Lincoln Road all the way north to 17th Street.”
“I violated all the rules,” he said. “I bought my first home before law school started. But it was two blocks from TRENDS
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Home GrownFlavor
Miami’s Restaurants Are Bringing New Flair to the Farm-to-Table Dining Movement By Andrea Speedy
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home grown flavor
C onsidering that Miami’s origins are deeply rooted in
agriculture and farming, it should come as no surprise that the latest haute cuisine around town is strongly tied to the farm-to-table movement. Noteworthy and up-and-coming chefs throughout the area have been making a stand for locally grown and raised, seasonal, sustainable ingredients on their menus for the past several years – and are now influencing the entire city’s palate when it comes to truly exceptional dining. Globally, the farm-to-table movement is aimed at delivering the kinds of impeccable taste that only come from the absolute freshest-possible produce, proteins, spices, and more. However, in recent years, the movement has also come to have significance in terms of environmental and social responsibility. On average, the shipment and travel of food generates about eight tons of carbon emissions per household, per year according to various reports by the National Resources Defense Council (NRDC). Utilizing ingredients grown and harvested in the immediate local area reduces associated air pollution from those emissions. At the same time, farm-to-table reinforces the idea of seasonality and natural growth cycles, which are a more efficient use of natural resources such as water. Lastly, foods grown locally are more likely to thrive well within the established eco-system, creating better opportunities for organic farming as native plants and livestock are either immune to or more hearty against local insects and environmental conditions like fungus or blight. The most obvious upside, of course, is that chefs and restaurateurs enjoy just-harvested freshness that brings big flavor to even the most nuanced dish. It is this particular trait that has caught the attention of local and international chefs alike, and placed Miami in the spotlight. Acclaimed Chef Michelle Bernstein can most likely be attributed as the pioneer for Miami’s farm-to-table scene. The award-winning Miami native was the culinary artist behind Azul at the Mandarin Oriental, before opening a number of her own restaurants, including Michy’s (recently re-launched as Cena by Michy), Seagrape at The Thompson Hotel on Miami Beach, and Crumb on Parchment in the Design District. At the heart of Bernstein’s signature tropicalmeets-fine-dining style is a talent for utilizing local ingredients that are often unheard of elsewhere in the country. Items like guava, plantains, jackfruit, naranja
agria, and local seafood such as Florida Snapper are regular highlights on her menus, and she even enlists local farmers to reserve portions of their crops specifically for her. Sharing in Bernstein’s passion for freshness, fellow award-winning Chef Michael Schwartz has been equally present in shaping Miami’s farm-to-table future. His popular Design-District eatery, Michael’s Genuine Food & Drink has been a staple in the area since 2009. His follow-ups, Harry’s Pizzeria, which now boasts two locations – the Design District and also Coconut Grove; The Cypress Room which has fast become a fine-dining favorite; and Restaurant Michael Schwartz on Miami Beach – all leverage local farm-fresh goods (often commissioned especially for Schwartz) for the tastes that keep people coming back. “We’ve got a lot going on down here right now… and it all boils down to product,” he said in a 2014 interview with The New Times. “I’d like to see more local fish and fewer imports – golden tilefish instead of branzino, for example.”
So Why Miami? Why Now? Despite its history in agriculture, the farming community in South Florida has been shrinking rapidly over the past 50-60 years. Land ideal for building gated neighborhoods, high-rises, and shopping centers has been gobbled up by developers eager to meet the demand for housing, jobs, and entertainment. However, as multiple cultures from throughout the Caribbean, South America, Europe, and beyond have moved in to South Florida, they’ve brought along their cultures by way of cuisine. The abundant growing season in Miami, combined with the rare suitability for tropical produce, and an incredible variety of seafood
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has created a situation that chefs simply cannot ignore. “In most places, you’re lucky to get one or two months of a few types of local produce,” says Erika Rullman of Farm Fresh Miami – a produce buying club aimed at making the products of Florida farms more accessible to local consumers. “Here in Miami – and in Florida in general – we enjoy almost an entire year of spectacular fruits, vegetables, and more. That’s something that will only stick around if it’s supported by our local community and restaurants.” Like Bernstein and Schwartz, Rullman enjoys strong relationships with local growers, who routinely pick the produce for Farm Fresh Miami within 24 hours of it being delivered to the club’s members. Growers are also seeing value from their harvests being sold and used in the local surrounding region. Transport costs are lower, so the produce itself can often be sold at a higher margin. Chefs and direct consumers still save over storebought goods since there’s fewer links to pay in the distribution chain, and farmers get more money per item on their crops which crucial to those farms’ survival. Once the fruit, vegetable, meat, or fish is sold, there’s no more money to be earned by the farmer, rancher, or fisherman. So it’s important to be able to get fair value (instead of below-market value) for their harvest. Though it is abundance that has undoubtedly attracted chefs to South Florida, they are now key advocates for supporting and saving Florida’s farms, ranches, and fishing waters – appreciating that their own livelihoods are tied to the success of the farming community.
“Miami Boy” Makes Good Bernstein isn’t the only local celebrity chef with deep Miami roots. A number of new-generation restaurateurs who grew up in South Florida have been quick to pick up on the recent demand for farm-to-table dining in Miami.
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Brendan Connor of Whisk Gourmet in South Miami is a Miami native who has returned home after an illustrious career in top restaurants in South Carolina. His concept: simple-yet-spectacular food with a Southern-comfort vibe. “In order to do simple food,” Connor explains, “you have to be working with the best, freshest ingredients. Those are the flavors you want to bring to life. Anything else is just working hard to overcome disappointing quality.” Connor’s sister and business partner Kristin, echoes his sentiments. “There’s an extended growing season in South Florida,” she begins, “but it’s always exciting when beautiful, tasty, local heirloom tomatoes become ripe… there’s nothing else in the world like them.” Proof positive of Kristin Connor’s statement can be found in the restaurant’s signature crowd pleaser – fried green tomatoes, which can be enjoyed as an appetizer, as an accent on salads, or as a side dish. Picked just before traditional colorful ripe-ness, juicy local tomatoes are sliced to medium thickness, lightly coated with breadcrumbs and browned to crisp perfection. Served alongside daily homemade herb buttermilk dressing, the dish is a true win for farmto-table cuisine. Clearly, the Whisk team’s dedication to pure product and excellent flavor is a huge reason why Chef Brendan Connor has caught the eye of Food Network. His crispy shallot, bacon, and Swiss burger took home the Judge’s Favorite award from the South Beach Wine & Food Fest in 2012, and at this year’s event, he’s co-hosting an intimate private dinner alongside Chef Anne Burrell and Chef Marc Murphy.
Also In the Spotlight Another South Beach Wine & Food Festival alumnus is also keeping things “real” in the farm-to-table sense at The Federal. Headed by Chef Cesar Zapata, and Located in Miami’s up-and-coming Mid-Biscayne restaurant district, The Federal has also been featured on Food Network’s Diners, DriveIns & Dives; by Food & Wine magazine; and numerous local, regional, and national publications that consistently list The Federal as one of Miami’s Top 20 restaurants. Besides Zapata’s
home grown flavor
impressive resume that includes the Four Seasons Miami and The Setai South Beach, the chef’s careful selection of ingredients is one very important reason why. From the simply amazing Florida baby heirloom tomato salad, which mixes with local avocado, hearts of palm, oranges, and queso fresco to a delectable balance of sweet and savory… to the spicy clams sourced from Florida’s own Cedar Key… to the Key West rock shrimp over roasted corn and finely sliced vegetables… to various steaks and slowsmoked brisket made only with grass-fed beef, The Federal is proof of just how tasty farm-to-table can be when done right.
While great farm-sourced taste is indeed a hallmark of DIRT, it’s efforts like working to becoming the first restaurant south of Tampa to be certified REAL (Responsible Epicurean and Agricultural Leadership) by the U.S. Healthful Food Council. In concepting the restaurant, owner Jeff LaTulippe and his partners Matt Ernst and Executive Chef Jonathan Seningen wanted to go beyond the stereotypical, often pretentious atmosphere that goes along with vegan, vegetarian, and other eateries with a large focus on produce. Instead, they created a menu meant to bring smart, real food within arm’s reach of many different kinds of diners. There are daily made-in-house juices for those that prefer liquid fruits and veggies.
Order Up-and-Coming Big-name chefs and highly popular local spots aren’t the only ones capturing their own bit of the spotlight thanks to the rising popularity of farm-to-table dining. The menu at MC Kitchen in the Design District is yet another “who’s who” of Florida farm-fresh offerings. Bruschetta gets turned way, way up with a deliciously gooey farm egg and fresh braised artichoke served alongside crisp, doughy ciabatta. Antipasti goes antiestablishment with Loxahatchee tomatoes bursting with sweet juiciness and succulent bite – so much so that the dish is named for the tomatoes themselves, and not the aged parmesan, prosciutto, and basil accompaniments. Chef Dena Marino – who spent three years under renowned Napa chef, Michael Chiarello, and also studied with Mario Batali – shines brightest, however, with her sea-to-table dishes. Grouper, stone crab, Red Snapper, prawns, swordfish, clams, and even octopus are all sourced from the waters surrounding Florida, with the line-caught whole fish of the day always a sure bet for perfection. Marino often pairs the local seafood bounty with the brightest and tastiest produce from the season, ranging from Mango to lime, to strawberry, and everything in between.
Responsibly sourced meats are available in salads and sandwiches. And inventive twists like jalapeno zucchini slaw, orange-basil roasted chicken, and quinoa-crusted day-boat fish show an enticing new side to the farm-to-table idea. In fact, LaTulippe prefers to describe to the restaurant in a next-step-forward sense. "At DIRT, our goal is to develop more of a ‘farmto-counter’ experience in a fast casual setting, making healthy, locavore dining quicker, more convenient, and more affordable for everyone," he explains.
The latest newcomer to the farm-to-table movement in South Florida is also, perhaps, one of its most interesting as it seeks to become a leader in what’s next for the approach. DIRT opened on South Beach at the end of 2015, with a desire to create a stronger connection between the land, food, and people.
In considering what’s next for farm-to-table, DIRT has also shed more light on what’s driving it now. Chefs do play a pivotal role… but so do those who’ve refined their diets, lifestyles, or eating choices to favor natural foods. Words like organic, grass-fed, gluten-free, and paleo are now distinctions as important as vegan and vegetarian, which it is worth noting Miami was slow to adopt compared to other major U.S. cities. However, though Miami may have been a little late to arrive at the farm-to-table concept, it is already poised to become its new capital, and maybe even its model for the future.
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m i ami beach
A Market on the Move
2015
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rimarily thought of as a travel destination dominated by sunny beaches, colorful neon, posh hotels, and glitzy nightclubs, Miami Beach continues to make a strong claim as one of South Florida’s most influential economic drivers. Population numbers continue to grow year over year, as do employment, income, spending, and along with it – the demand for quality retail space. TRENDS
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Retail Report
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owhere is this more prevalent than in the already dense South Beach market, and its three key high-street areas: Lincoln Road, Collins Avenue, and Ocean Drive. Currently, the population is estimated at 89,088 full-time residents plus an additional 6.9 million in overnight visitors recorded in 2014. With an average stay of 5 nights, visitor traffic most certainly extends beyond hotel and resort grounds to the retail, restaurant, and entertainment venues in the area, not to mention the many tourists that stay in private vacation rentals or non-resort properties. Population is expected to continue to increase by a steady 1.7% year over year in the future… and tourism numbers are not showing any signs of decrease.
Source: U.S. Census Bureau, Census 2010 Summary. Esri forecasts for 2015 and 2020.
What’s Driving the Robust Miami Beach Market? Traditionally, the retail scenario in the area is dominated by two sectors – Food & Beverage Away from Home (a $160 million market) and Apparel & Fashion (a nearly $115 million market). And while it may be easy to assume this is largely tourist driven, the per-person yearly spending figures highlight a strong, steady local retail draw. The average yearly food and beverage spend per person is more than $3300 – with 17.7% of people engaging in fine dining experiences in which the total bill was $50 or more. This is particularly significant for the many sidewalk cafés and restaurants along Lincoln Road and Ocean Drive, where the cost of retail space is quite high. In order for food and beverage operations to be financially successful, casual dining prices must attract very high
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traffic or, conversely, lower-traffic operations must be able to offer a higher-priced fine dining experience that still has perceived value to consumers. With close to 20% of the market willing to spend more than $50 on out-of-home dining, this allows mid-range restaurants a chance to compete in the same high-demand locations as premium fine dining destinations. The apparel market’s average per person yearly spend comes in at approximately $2400 per person, which represents both local boutique fashion as well as nationwide and international retailers like Gap, Banana Republic, H&M, and Lululemon, to name a few. As retail rents continue to climb upward, however, the apparel retail mix may become less diversified. Bigger branded retailers with established loyal customers
will be better positioned for profitability for several reasons, including cost of goods based on economy of scale, advertising, and the ability to leverage rent expenses (which may result in single-store losses) against exposure value and strong earnings across the entire brand. Local shops and one-shop-only destinations will be less likely to afford higher rents and may relocate to more value-based locations within the same Miami Beach market. General Retail Goods is another indicator of overall market strength, with more than $24,000 spent per person each year in support of a more than $1 billion total market. This includes electronics, home furnishings, art and design, housewares, sporting equipment, and other submarkets – all of which indicate that even Miami Beach’s most robust retail market is not fully reliant on tourist traffic. Recent additions to the area, such as a multi-level grocery and big-box retail installation on 5th Street and Alton Road, are attracting more general goods retailers, as are a number of redevelopment opportunities along Miami Beach’s high streets.
Source: Terranova Corporation, Field and Market Survey completed October 2015.
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Retail Report
Source: Greater Miami and the Beaches 2014 Visitor Industry Overview; Broward Housing Council; Miami-Dade County Economic-Demographic Profile: U.S. Census Bureau, Census 2010 Summary. Esri forecasts for 2015 and 2020
So Where Are Retailers to Go? Historically, the answer has been to go into their pocketbooks as the age-old equation of supply and demand has driven up rents across the board. In the past year alone, retail rents on Lincoln Road have increased from $330.06 per square foot on average to $346.23, a 4.8% increase. The situation is similar on Collins Avenue, where rents have increased 9.3% between 2014 and 2015 from an average of $125.35 per square foot to $137.08. Ocean Drive saw an astounding 40% jump in average rental rates from $125 to $175 during the same time. Though the actual dollar figures associated with rental rates shows a wide range of pricing, the difference is largely attributable to total available size, age, and amenities available within each high street market. Lincoln Road, for instance was first redeveloped in the mid-1990s – offering newer, upgraded spaces for large retail operations. Today, it functions as a pedestrian mall, and far exceeds the typical rental rates. In contrast, Collins Avenue and Ocean Drive are anchored by historic buildings from the 1920s through 1940s, with smaller spaces reflective of the time period. Upgrades and expansions on these high streets often involves more construction or build out than is typical on Lincoln Road. The fact that Collins Avenue and Ocean Drive continue to perform strong
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against average rents throughout South Florida are further proof of their statuses as preferred retail locations.
Is South Beach Really Worth the Cost? With plenty of retail, shopping, and entertainment destinations in the greater Miami metropolitan area, the logical question is whether or not it’s worth the expense. After all, Miami Beach is a relatively small population, which begs a question of sustainability. Residents in the area do have a higher-than-typical average income of $73,573 per household, and more than 8.2% of households have an annual income of $200,000 or more, but is that enough? It’s actually a very strong foundation when considering the local draw of Lincoln Road, Collins Avenue, and Ocean Drive actually extends well beyond the geographic borders of the island. Nearly 1.4 million residents in the surrounding Miami-Dade county area account for a significant potential market with an average household income of $62,852. The same goes for nearly 1.9 million residents in neighboring Broward County with a median household income of $63,300. These are shoppers and patrons not usually included in tourist expenditures or overnight visitation, but still contribute greatly to the year-round market strength of Miami Beach high street districts.
Retail Report
Annual traffic numbers support the strength of the overall market, even though Lincoln Road, Collins Avenue, and Ocean Drive are predominantly pedestrian destinations, valued for their walk-ability. This has undoubtedly been a deciding factor in many domestic and international brands securing “flagship” locations along these globally visible high streets. (See map on pg. 24.)
…And Things Are Only Looking Up Rental rates aren’t the only thing on the rise on Miami Beach’s high streets - buildings themselves are going vertical to address the demand for more retail and residential space. A number of redevelopment projects are already underway that are expected to further cement the area’s high streets as major retail centers. LINCOLN ROAD Anticipating future growth, the City of Miami Beach embarked on The Lincoln Road Master Plan project in early 2015. The goal is to expand on the pedestrianfriendly district with more walkways, thoroughfares, leisure areas, and sidewalk café spaces – not only on Lincoln Road itself, but its adjacent cross streets and through streets. The first blushes of this approach can already be seen at the corner of Lincoln Road and
Alton Road with the redesigned plaza area at the foot of the Herzog & De Meuron-designed 1111 Lincoln Road. Though not part of the city’s Lincoln Road Master Plan, the revitalized area has attracted multiple new restaurant and retail destinations to a previously underutilized area. Along the north edge of Lincoln Road, work will begin in late December to transform the Miami Beach Convention Center into a leadingedge facility (see inset on page 25), complete with 1.4 million square feet of total space and 870 rooftop parking spaces – all of which should be accessible to Lincoln Road visitors. The existing parking lot would become a park and green space with a bus loop that riders could use to easily access the midpoint of the Lincoln Road district. Over the past year, Lincoln Road has been scrambling to shuffle tenants from old spaces to temporary spaces while new spaces are being built. It seems as quickly as one tenant departs its location, there are many other corporate brands eager to take its place. So while vacancies have increased from 9.4% in 2014 to 12.23% in 2015 – these are largely “on paper” figures that do not reflect future destinations still under construction or those businesses still in negotiations for the existing spaces.
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Retail Report
Notable Events: · Gap 2-Story Complex on Lincoln Road and Michigan Ave doubles space for the retailer to 15,000 square feet · New Nike Store with proposed rooftop basketball court under construction at Lincoln Road and Lenox Avenue - Relocates Williams Sonoma and Pottery Barn (total of 14,000 square feet) to Michigan Avenue · Construction continues on corner of Lincoln Road and Euclid Avenue (657-643 Lincoln Road) with proposed new tenants to include Sugar Factory, Pandora, and a mini burger concept restaurant · Anthropologie slated to move to new location on the upcoming North Lincoln Lane district on Meridian Avenue - Leaves a 10,000 square foot opportunity on Lincoln Road, near Lenox Avenue · Other major North Lincoln Lane projects include major retailers like Marshalls · New Britto Gallery coming soon to east end of Lincoln Road · Lululemon opens on prominent corner of Lincoln Road and Jefferson Avenue · Suit Supply Menswear, now open on north edge of Lincoln Road with rooftop terrace · New site acquired for future 3-story, 15,000-square-foot retail development at Drexel Avenue adjacent to the Miami Beach Community Church · Walgreens on 100 Lincoln Road and Collins Avenue to relocate within The Ritz-Carlton Resort Complex
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Retail Report
COLLINS AVENUE Redevelopment is making a huge push on the famed historic high street just steps from the Atlantic. Like Lincoln Road, retailers are demanding more space and/or multi-story locations. Among the first to accomplish this on Collins Avenue years ago was Urban Outfitters. The brand has now moved to Lincoln Road in another market shuffle – but set the tone for what is now the future of the Collins Avenue shopping district. Numerous buildings have sold lately, with plans reported to range from new mixed-use developments that deliver more and larger ground-floor retail spaces, with new and more spacious residential components above. Though city zoning and planning is more restrictive in this historic neighborhood, it is expected that city officials will be willing to work with developers on preservation and height requirements in return for responsible infrastructure and increased parking considerations. In light of these changes, vacancy increased from 7.5% in 2014 to 23.19% in 2015,
largely because of the redevelopment of of 727 and 735 Collins, 852 Collins, and 909 Collins, though more will likely follow suit in the future. Like Lincoln Road, retail tenants are playing a game of round robin in the meantime – with departures like Quiksilver likely to re-emerge either in a new Collins Avenue destination, or somewhere else on Miami Beach’s high streets. Likewise, displaced retailers from Lincoln Road and smaller shops and restaurants seeking lower prices should flock to Collins Avenue for more value with equal exposure. OCEAN DRIVE Arguably one of the most famous streets in the world, Ocean Drive is eager to usher in an area of economic growth and success that extends beyond boutique hotels and sidewalk cafés. As the South of Fifth portions of Ocean Drive continue to be bought up and developed or redeveloped, the pressure is on for the stretch between 5th Street and 15th Street to follow suit. Of course, Ocean Drive and its deco-era hotels are among the most protected pieces of real estate
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Retail Report
in the country, but the cross streets Ocean Court, immediately behind Ocean Drive, are much less restricted. This, and the enduring cache of an Ocean Drive address are spurring on some recent sales and proposed redevelopment designed to answer the demand for increased retail presence along the highprofile thoroughfare. Already under redevelopment are 1320 and 1330 Ocean Drive – which presently host a collection of small boutique shops with limited street visibility. Also on property are offices and vacation rental condos – both of which are expected to be included in the redevelopment, and The Cavalier deco-era hotel, which will need to keep its historic façade but can be expected to rethink the interior flow and usage of space at the ground level and above. The construction of these properties is the leading factor behind Ocean Drive’s vacancy increase from 0.6% in 2014 to 5.61% in 2015. 1451 Ocean Drive has multiple smaller retail units for sale, 102 and 103 – which are adjacent, could be combined into a larger single space for shopping or
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restaurant usage. Once either property is complete, they should be able to demand among the highest rents on Ocean Drive as they will be among the largest available spaces on the street.
What’s On the Horizon? Outside the major high streets, Miami Beach very much remains a hot market that is constantly evolving. The South of Fifth neighborhood is in the midst of another fast-and-furious development cycle. The very last portion of vacant land was sold just over a year ago and will soon be home to a multi-million-dollar, ultra-luxury condominium property, as will many other sites already under construction. Alton Road, 1st Street, 2nd Street, and Washington Avenue in this
area continue to attract chic eateries and retailers, including yacht sales and elite real estate sales. Along Alton Road and West Avenue, considerable infrastructure improvements designed to manage rainwater will also come with newly paved roadways upon completion. Like other high streets, the area has seen many retailers shift to new destinations during construction. Of note, the popular Taste Bakery Café, once an Alton Road staple, now occupies a significantly larger location in the North Lincoln Lane district surrounding Lincoln Road. The smaller boutiques and storefronts on this western edge of the island will undoubtedly need to follow other high streets in redevelopment efforts in order to stay competitive in the future. Also emerging is the once forgotten pocket of retail and residential properties on a northeast corner just off Lincoln Road between Washington Avenue and Collins Avenue. A recent acquisition known as Collins Park by a single developer for properties located at 2035 Washington Avenue, 430 21st Street, 2030 Park Avenue, 2000 Park Avenue, 425 20th Street, and 435 20th Street creates a single 1.65-acre parcel just a block away from the Bass Museum of Art and two to three blocks from the New World Symphony plaza and Jackie Gleason Center for the Performing Arts. As Lincoln Road opportunities continue to spill over into neighboring streets – the decisions made regarding the combination restoration-rebuild-new build project will have retail repercussions as well.
City to Add $5 Billion in Economic Impact with Convention Center Makeover Often overlooked when surveying the Miami Beach retail market, the Convention Center sits at a major crossroads – both literally and figuratively – for the city’s economic future. Located just north of Lincoln Road and only a few blocks from Alton Road, the 58-yearold facility is about to undergo a major redevelopment. The new building will total 1.4 million square feet, with 505,000 square feet of indoor exhibition space, 10 additional meeting rooms, and 870 on-site parking spaces. The move is aimed at attracting major business sectors like medical, pharmaceuticals, tech, automotive, finance, and others with a state-of-the-art destination for events of all sizes and scales.
An aggressive 30-month construction schedule would have the newly re-imagined facility welcoming visitors as early as December 2018. The potential influx of several thousand additional visitors per year would make sizable waves in the surrounding retail market. Conservative estimates place the economic impact to be more than $5 billion over the next 30 years, and could be even greater if other popular convention destinations in Orlando, San Diego, and San Antonio don’t keep pace with the new Miami Beach Convention Center. The local market would also get a boost from the new center, as plans include a large public park in a space that was previously dedicated to an overcrowded, inefficient, and unattractive parking lot. The new park space would be adjacent to the Miami Beach Botanical Garden site, and feel like a natural extension of the often-forgotten destination. TRENDS
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America's immigrants, todays entrepreneurs By Patricia Guarch Wise
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n “Open for Business: How Immigrants Are Driving Small Business Creation In The Unites States” The Partnership for a New American Economy found that 40 percent of America’s Fortune 500 companies were founded by immigrants.
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“ mmigrating is an entrepreneurial act; risk is in the very definition of entrepreneur and what can be more risky that to leave one’s home country and start a new life elsewhere? It takes the same kind of bravery that it takes to start a new business, follow a big idea and risk your financial stability in hopes of a better life.
there and opened his first Janette & Co. on Sunset Drive. He knew the business would stand apart for their commitment to quality; he imports Valrhona chocolate from France along with all the other specialty ingredients they need to make the perfect, traditional macaron.
America's immigrants are inextricably tied to the nation’s narrative of economic success. American children learn the history of the country alongside the waves of immigrants who’ve come here since the Europeans declared the country the New World. Early immigrants came for religious freedom, economic opportunity and to restart their lives in a new place.
Soon enough, they were ready to open a second Janette & Co. location right on Coral Gables’ Miracle Mile. “I don’t look to be everywhere,” says Quentin, “I want quality over quantity. I don't want to grow fast. I want to be careful and keep the quality.”
This is still true today. Immigrants own more than 10% of incorporated businesses in the United States. In 2011, more than one in four new businesses were started by immigrants, although they make up only 12.9 percent of the population. Their businesses tend to be smaller, they create jobs and give our neighborhoods deserved upgrades. So what does this mean for Miami? Miami has the most foreign-born residents of any city in the country according to data from the Census’ American Community Survey. According to to the National Immigration Forum, as of March 2015, 65.4% of Miami’s labor force is made of immigrants. If young businesses are more likely to be started by immigrants and our young city has the most immigrants of any American city, we must be amongst the nation's most entrepreneurial cities. It means there are lots of stories like Quentin and Agnes Carrigou’s:
A Sweet Story: Quentin carrigou Quentin Carrigou came to the United States from France to work in the restaurant business. After putting in the work at a French restaurant, he and his wife, Agnes, decided it was time they opened their own business. They instinctively knew that macarons would be a hit. The delicious, creamy, ganache-filled cookies that come in a range of powdery colors and flavors, from rose to coconut to salted caramel, buttercream and basil and white chocolate are beloved in France, trendy in New York and prime for success in the Miami market. Quentin took to the market with the eye of an entrepreneur. He used a demographic study of Miami to research a location in a wealthy, family-friendly neighborhood. He settled on South Miami, moved
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As a small business owner in Miami, he’s adapted to the market, “I didn’t know guava before I came here. It’s not a food we usually eat in France. Apparently here you have guava and cream cheese together and everyone asks me, so I said ok.” They added a guava and cream cheese macaron along with a mango macaron, non-traditional flavors you won’t see in France, made just for the South Florida market.
The Miami Market Miami took a hard hit in the market collapse of the Great Recession. We’ve been steadily climbing towards a recovery and the past year has been a good one for us; a Kaufmann Foundation index reports that the Miami-Fort Lauderdale area has more startup businesses in the past year than any city besides Austin, Texas. We ranked third in 2013 and first in 2012. The biggest annual events in Miami draw people from around the world and they couldn’t be any diverse. Are there two events any more different than the Calle Ocho Festival hosted by the Kiwanis Club of Little Havana and Art Basel, the sister festival to Switzerland’s contemporary art festival?
Miami has the perfect support system for continued growth after some trying years for both the country and the city. You don’t have to look to far to see the effect that our foreign-born population has already had on the city. Increased numbers of immigrants have driven up tourism, brought new and exciting foods to our market and distinct cultures have come together to make the city a unique fusion of people you can't find anywhere else. The city’s most common told immigrant narrative is that of the Cuban community. According to a Pew Hispanic report in 2014, 54% of Miami’s population is Cuban-American. Cubans started coming to Miami in large numbers after Fidel Castro’s rise to power in 1959. Since then, the city has grown into a major metropolitan hub of business and trade and a cultural center of America. The best and brightest Cubans have come to Miami and made their impact on politics, business, the arts, food, architecture and the cultural fabric of the community. They made Miami a bilingual city, a comfortable place for other Latinos to call home. As we move towards continued growth in Miami, it’s immigrants from all over the world who are shaping the city by establishing businesses in South Florida.
Translating Culture: Graziano Sborggio When Graziano came to Miami the only thing he knew about the city was ‘Miami Vice.’ He grew up in Italy, twenty miles northeast of Venice and worked in the restaurant industry. He wanted to open a restaurant a bit closer to town so he met with a potential business partner who had something else in mind, move to Miami and run the Tiramesu that just opened in Miami Beach. He didn’t speak English. He didn’t speak Spanish. But he agreed to come to Miami on vacation and then decide if he was up for the challenge. A born entrepreneur and a hard worker by nature, Graziano accepted the challenge and started a new life working on Ocean Drive in 1990. “I was lost in the beginning to me honest, but I felt I would be a failure if I went back,” says Graziano. “The biggest obstacle was not having the
communication, not knowing the language so I bought a car and enrolled immediately in school at the South Campus of Miami-Dade College in Kendall.” Twenty five years later he says his children tease him for his lingering accent, but it only took him about seven months to be able to hold a conversation in English. The language was a major change for Graziano, but learning to interpret the culture was an even bigger challenge. Italian service and American service are distinctly different, as Graziano tells it, “In Italy, the waiters are very professional individually, but they have very poor customer service. They come, they take your order, they walk away. The client goes out for a meal and they don’t want to be bothered. Here, there’s a different mentality, they (waiters) are part of the experience, they are engaged in the conversation.” It wasn’t overnight that he realized the key to success would be importing the Italian way of cooking while learning from the American service model. It took years before they found the balanced formula of Italian traditional food served with American customer service that he now applies to all his restaurants. In 1997 they moved Tiramesu to Lincoln Road, Miami Beach’s most popular shopping and dining street. Shortly after their move to Lincoln Road, the neighboring property became available and they opened Spris. The simple concept of pizza, salad and sandwiches was a hit from the beginning. Later he opened Segafredo L’Originale, a European lounge concept. Segafredo always has a crowd, it’s a place to grab an after-work drink or hangout for an evening. That concept too took a bit of time for people to understand, it’s a European concept that made sense in the Miami culture, but no one had successfully translated it. A specific example of this balance comes to mind, “(At Tiramesu) we don’t suggest that you serve any cheese with seafood pasta. But, if a client wants cheese we definitely will bring you cheese, and happily! The waitstaff even asks the client if they want cheese! That’s what I mean, we’ve transformed the customer service instead of the recipe.” Another example? At Tiramesu they didn’t serve American coffee when they
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first opened, and now they do. He once served only Italian wines, but now they have an international wine list. One gets the feeling that these were growing pains figured out, maybe a bit bumpily along the way, but that’s to be expected. And it’s not just in his business that Graziano’s had to find a way to communicate across cultures, “I had an architect in Italy who designed the house where I live with my family here on Miami Beach. We had to convince the American architect why we wanted to do certain things to the house. The American architect said the bathrooms should be bigger but I said ‘Why? I take a shower, I use the bathroom! That’s it!”
Finding Home Across The World: Frankie Nguyen The stories of Miami’s immigrant business owners couldn’t be any more different. Some, like Graziano, came here on a leap of good faith with a job already waiting, others, like Frankie Nguyen, have been forced to leave their home country as refugees escaping the plight of war, persecution or natural disasters - in Frankie’s case it was war and political upheaval.
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Chinese restaurants, plus a few years experience in kitchens when his parents briefly ran a restaurant in his childhood, he was ready to start his own, more authentic place. He found Chinese and American cooking simple to prepare and rather greasy. Miami’s image-conscious market would appreciate the healthy preparation of Vietnamese cuisine. He adapted the food a bit for vegetables that are hard to find. He doesn’t serve the whole fish with the bones the way they do in Vietnam, the fish sauce isn’t as strong as the original way, so he’s changed it a bit along the way as he has gotten to know the American taste pallet.
“I left Vietnam in 1982. In that time, Vietnam was so bad and the country was destroyed,” he explains. “In this country I feel like I have another life. This is my country right now. I have four children and there is opportunity for them they have a good life and a good future. If I had stayed in Vietnam I don’t know what would have gone on…” he trails off. “I love this country. This is my country right now.”
Frankie came to the United States in 1983. “I escaped from Vietnam and went to Thailand by a very small boat,” he says, “I was on the ocean for eight days on a boat with my wife and we almost died. We arrived in Thailand and went to a refugee camp. We had family in Miami. We came to Miami in 1983 and we’ve lived in Miami since then.”
The narrative of escape by boat sounds familiar to Miami’s largest group of immigrants, the Cuban exiles. Frankie brings up the similarities and the devastating effect of the communist regime on both countries. Both groups benefit from a similar climate to their home country's. For Cuba, a neighboring country, that may seem obvious, but Vietnam, a twenty hour flight away, it’s a bit more surprising. “It’s similar, not too cold. Sunny. That’s been good for me,” says Frankie.
The story is not that simple, but ultimately he landed on an idea so straightforward it seemed obvious - there aren’t a lot of Vietnamese restaurants in Miami. After working in kitchens of American and
Frankie’s story is one that strikes a chord with almost anyone who came here as a young married person, he had to figure out how to provide a life for his family. He enrolled in language classes immediately and started
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learning English while working part-time at Chinese restaurants, but when he and his wife became pregnant he had to pause his education and focus on working more to get ready for his daughter’s arrival.
The Future of Miami Miami is growing. Just take a glimpse at our skyline or a peek into the daily newspaper. We’re looking at mega-projects that will drive the economy, sustain neighborhoods and create environments for continued growth. The subject around dinner tables and at cocktail parties is what the city should focus on and how to handle the increasing density of our major urban areas.
When the conversation with Graziano turns to the future of Miami, he sees a clear vision of growth. “Everyone wants to be here for one reason or another,” he says “before it was just Miami Beach but it became an attraction for around the world.” Like most conversations about Miami’s future, it doesn’t take long to shift to the real estate market, “Look at whats happened with the real estate market, it’s so international. For the locals, that can be good and bad, the renters are kind of forced to move out and owners sell the property and move to another part of Miami, but that’s good too, it gets us to develop other areas such as Wynwood.” He sees a Miami that can figure out the growing pains that come with fast change, like parking, “I feel Miami Beach is a little Manhattan and other transportation, other than cars, would be great. We need to walk more, bicycle, taxi and find alternatives to driving cars all the time.” His mode of choice right now? Uber and walking. “People in Miami are used to jumping in the car to drive ten blocks. They don’t walk. Yes, it’s very
hard to walk in the summer but look, it’s not refreshing to go for a walk in New York either.” In the future, he sees unchartered territory that can solve Miami’s traffic problems, “I would love to see a type of water taxi. Coming from a city near Venice, we would take a train and then a water taxi. Here it could start by just connecting Downtown and Miami Beach.” It isn’t a stretch to compare Venice and Miami Beach, both island communities severely affected by sea level rise and sustained by tourism economies. An article in Bloomberg Businessweek reported that while they only make up 12% of the U.S. population, “immigrants have started 52 percent of Silicon Valley’s
technology companies and contribute to more than 25 percent of our global patents.” Miami may not be Silicon Valley, our economy is primarily fueled by tourism, international trade and banking, but we have seen a buzzy tech community start to grow in the past few years and it’s projected by all accounts to keep growing. Maybe Graziano is onto something. One thing is for certain, the future of Miami Beach and Greater Miami depend on our international community. Miami depends on them to keep up with the exponential growth of this young city, to bring their cultures and traditions and look at the city with the perspective and history of different cultures. We can look forward to a bright future with more people like Frankie figuring out that Americans aren’t game for pungent fish sauce, to a future of California wine at an Italian restaurant and guava macaroons.
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