The competition among cities to attract retailers has always been fierce, with New York long being considered the epicenter of retail and trendsetting. However, lately the sunny, vibrant streets of Miami, Florida have emerged as a magnet, attracting, and even luring away a growing number of retailers from the Northeast. The recent change has been driven by South Florida’s growing population, more specifically where they are coming from and the retail they are used to. This population influx has thrust Miami into the spotlight making it the go-to destination for retailers looking to make a mark and follow their clientele. Miami offers arguably one of the most favorable lifestyles, contributing to the growing wealth of the residents by attracting entertainers, athletes, influencers, and business owners to move to Miami causing retail to flourish and making Miami one of the first places in conversations of where luxury brands should open next. The thriving economy and diverse cultural scene placed Miami in retailers’ considerations early on, solidifying its position as a preferred retail destination and propelling it to become a retail powerhouse.
Florida’s Economy Flourishes Amidst Growth Surge
With more than 1,200 people moving to Florida each day, the state ranks number one in domestic migration and number two in international migration, making it the fastest growing state for the first time since 1957. Furthermore, Florida is constantly diversifying with international migration making up 30 percent of total relocations. This contributes to the State’s growing Gross Domestic Product (GDP) bolstering the economy, which would rank 15th largest economy in the world if it were an independent country according to 2020 data. Since then, Florida’s GDP has only grown, reaching $1.4 trillion in the first quarter of 2023, a growth rate of 3.5 percent per year compared to New York’s 1.3 percent per year.
The growing and diverse residents of Florida are avid spenders, with the average household spending more than $26,600 annually on retail goods driving demand for retail space which has reached 1.3 billion square feet in 2023 accounting for 10 percent of the total U.S. retail inventory. Increasing demand from new consumers has driven the state’s new supply, accounting for 19 percent of new U.S retail supply year-to-date. Furthermore, Florida’s retail vacancy rates are at a historical low of 3.3 percent, not seen since 2007. The low vacancy rate in recent years has driven construction with new retail supply in Miami accounting for 21 percent of the state’s new supply year-to-date.
Home to 2.7 million residents, Miami is the seventh highest density city in the U.S., and accounts for 12 percent of Florida’s population while being in a two-hour drive time of nearly one-third of the state’s population. Over the last 12 months (as of September 2023), for every 10,000 workers that move to Miami, 11.45 of them moved from New York which isn’t a surprise given the office tenants that have announced relocations or additional offices in Miami such as Citadel, Icahn Enterprises, and Blackstone. The relentless in-migration from New York has encouraged New York retailers to follow their customer base making it so that New Yorkers don’t have to find a new gym franchise they like and can always rely on restaurants they know and love in a tropical, vacation-like environment. In fact, following their customer base was cited by wellness center, Ject, as a reason for opening a location in Miami’s Sunset Harbour neighborhood. Additionally, the New York-based restaurant group, Major Food Group, has opened a handful of restaurants in Miami, making it their second largest market.
The relentless in-migration from New York has encouraged New York retailers to follow their customer base making it so that New Yorkers don’t have to find a new gym franchise they like and can always rely on restaurants they know and love in a tropical, vacation-like environment.
Retailers Embrace Miami’s Allure
The largest shift of New York retailers coming to Miami took place during the pandemic, when Florida implemented relaxed restrictions and had a clientele that was eager to dine out. Shortly after, Miami resumed operations at full capacity, and even expanded to outdoor seating while New York largely remained closed. As Miami reopened and New York retailers, specifically restaurants, were tired of waiting they raced down to profit from the open economy and growing population. So much so, that bidding wars even took place for second generation restaurant space that was already fitted and came with permits and infrastructure to allow them to open quickly. For example, Carbone snagged the Upland space, a second-generation restaurant space, in Miami Beach which allowed them to open and begin service within three months of signing the lease.
The shift was originally thought to be a “bubble,” a short-term phenomenon, that once there was a successful vaccine roll out and major cities like New York reopened that Miami would see renewed competition and some retailers exit or relocate. However, that did not happen, in fact, vacancy rates in New York City have not returned to pre-pandemic levels and instead have increased, reaching their highest point the in last ten years. Meanwhile, Miami’s vacancy rate has remained lower than pre-pandemic levels since mid-2021. As the New York to Miami trend continues, other retailers seek to capitalize on the growing population and changing demographics as well as the tourism economic base that all give to the area’s swelling spending power all of which is pushing rents up in Miami, making it second only to New York City.
Miami’s highest rent submarket, Wynwood/Design District, is vibrant and artistic making it a cultural hub with an incredible dining scene. New York retailers that have recently opened shop in the submarket include Cote (Michelin-starred steakhouse), Prince Street Pizza, Pastis (first location outside of New York), Brooklyn Dumpling Shop, Joe’s Pizza, Skin Spa, and 260 Sample Sale. Miami’s Central Business District submarkets of Downtown Maimi and Brickell have also attracted a fair share of New York retailers including Dirty French, Rhone, Black Tap, Serafina, Skin Spa, MAMO, and Alexander Sparks a high-end Manhattan jeweler.
South Beach has been known to attract high-end, famous retailers seeing this is where many celebrities’ own homes and choose to frequent, although the prestige has spread to the rest of Miami Beach as well. That being said, New York retailers new to Miami Beach include Le Jardin Boucherie, Avra, Rao’s, Catch, Roberta’s, Skin Spa, Todd Snyder, and Bondi Sushi. New York retailers did not stop with just the most well-known areas of Miami, they are even settling in some suburbs like Doral, with Chef Julian Medina opening a high-end Mexican restaurant in Downtown Doral and Rumble Boxing opening in Midtown Doral, and Coconut Grove, opening Two: Minds a luxury fashion concept.
While Miami has been the over-arching benefactor of New Yorkers moving, New York’s retail market has profited as well. Sharing similar demographics and establishing brand equity with New Yorkers, from visiting family who recently relocated, or part-time residents who share time between the two, Miami retailers are opening in New York. For instance, restaurants, Kyu founded in Miami in 2016 and Carrott Express founded in Miami Beach more than 30 years ago both opened their first Manhattan locations during the pandemic. Other first Manhattan locations for Miami-based retailers are YankeeKicks opening in NoHo and TREMBLE Pilates Studio opening in SoHo.
In the dynamic world of retail, anything is possible, and we are currently witnessing a turning of the tides from the iconic streets of New York City to the hot promenades of Miami. The cycle has only just begun with retailers riding the wave to Miami, following their clientele who now call Miami home, and isn’t expected to stop anytime soon. The more New Yorkers that move to Miami, the more retailers that follow them, in turn attracting more New Yorkers to a more favorable environment with all of the places they love to dine and shop at. The increasingly dynamic consumers of Miami make the decision to locate here a strategic one, not just a geographic one, where diversity and cultural abundance come together to create an unparalleled opportunity, leading Miami to a new era of retail.