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<\/p>\nThe holiday shopping season is a time when retailers\u00a0typically cash in\u00a0as Americans\u00a0rush to find the perfect gifts for their loved ones.\u00a0<\/p>\n
But this year, Santa\u2019s sleigh may be running a bit light as shoppers pull back on spending and South Florida retailers settle into a softening market.<\/p>\n
<\/p>\n
\n Bisnow\/Chloe Gallivan\n <\/p>\n
\n Shoppers roam Brickell City Centre on the weekend of Black Friday.\n <\/p>\n
Amid broader economic uncertainty and declining consumer confidence, retail rents have been falling in South Florida, absorption has turned negative and the vacancy rate has inched up over the last three quarters.<\/p>\n
\u201cI don’t think people have gotten into the holiday spirit quite yet, where in seasons past it was starting after Halloween,\u201d said\u00a0Current Capital Real Estate Group President Todd Nepola, who owns and manages dozens of Florida shopping centers. \u201cI don’t see people in Christmas mode and buying presents yet as rapidly as the years before.\u201d<\/p>\n
The holiday season is the strongest part of the year for retailers,\u00a0Colliers<\/a> Research Manager\u00a0Haley Boatright said. While it remains true, this year may be a bit softer than years past.<\/p>\n Average holiday budgets for Americans have dropped just more than 10% from $1,261 to $1,133 per person, according to a JLL\u00a0holiday retail report<\/a>.<\/p>\n Households\u00a0making less than $50K a year are making a steeper cut, dropping spending by 24% this year, while those in households earning more than $150K a year increased their spending by 26%, according to the report.<\/p>\n And while national Black Friday<\/a> retail sales rose 4.1%,\u00a0all of the gains came via\u00a0online shopping, which rose 10.4%,\u00a0Fashion Network reported<\/a>,\u00a0analyzing Mastercard SpendingPulse numbers.<\/p>\n In-person\u00a0spending dropped 3.6% on Friday and 8.6% on Saturday,\u00a0according to RetailNext data reported by FN.<\/p>\n \u201cWe’re not necessarily bothered by it,\u201d Jonathan Rosen,\u00a0JLL<\/a>‘s\u00a0executive vice president of retail in\u00a0its Miami office, said about online shopping outpacing in-person. \u201cThese brands still like and prefer to have an actual presence on the street, which is with a storefront.\u201d<\/p>\n In-person retail isn\u2019t going anywhere, especially among stronger national brands like Lululemon, Rosen said, \u201cbut it might shrink footprint on the retail side slightly.\u201d<\/p>\n Before\u00a0a projected softer holiday season, the South Florida retail sector has been slowing\u00a0for months, Nepola said.<\/p>\n \u201cI think it’s just the slowdown and everybody is banking on the so-called season, and I don’t know if Florida is quite as seasonal,\u201d Nepola said.<\/p>\n Asking rents in Miami-Dade County\u2019s retail sector have fallen 6.1% year-over-year to $42.56 per SF, according to a third-quarter Colliers report<\/a>. Vacancy has inched up over the last three quarters, reaching 3.8%, compared to 2.9%<\/a> at the beginning of the year.<\/p>\n After retailers absorbed 146K SF in the first quarter in Miami-Dade, absorption has turned negative in the two quarters since then, including 169K SF more vacated than occupied in Q2, according to Colliers.<\/p>\n \u201cThings have definitely gotten cooler across all sectors of retail, whether it be discretionary, like restaurants, to even used car lots,\u201d Nepola said. \u201cEverybody’s definitely feeling a slowdown down here in South Florida.\u201d<\/p>\n The Colliers report\u00a0says\u00a0the rise in vacancy suggests landlords may need to \u201csharpen\u201d concessions and pricing strategies, especially with vacancy expected to continue inching up, with 1.7M SF under construction, an increase from less than 1.5M SF a year ago.<\/p>\n \u201cSlower leasing momentum and negative absorption across the tri-county area reflect softening demand, compounded by economic headwinds like rising housing and insurance costs that strain consumer spending,\u201d the report says.<\/p>\n \n Bisnow\/Matt Wasielewski\n <\/p>\n \n A view of Brickell buildings from Brickell City Centre\n <\/p>\n Tenants are attributing\u00a0some of the slowdown to\u00a0changes in\u00a0immigration policies, which have led to the deportation or self-deportation of many residents in immigrant-heavy areas like Doral, where multifamily vacancy rates have begun to climb, The Wall Street Journal reported<\/a>.<\/p>\n In Florida, where about 22% of the population<\/a> is foreign-born, and Miami, where about 35% of the population<\/a> is foreign-born, not as many people are out and about as of late, Nepola said.<\/p>\n \u201cThat hurts a lot of my tenants, because a lot of my shopping centers are on \u2026 those kinds of streets that have a lot of traffic from the guys that [are at] Home Depot in the daytime, and there’s not as many guys there anymore,\u201d Nepola said.<\/p>\n Another contributing factor is declining consumer confidence, which fell nearly\u00a07 points in November to 88.7, the lowest reading since April,\u00a0according to The Conference Board<\/a>.\u00a0<\/p>\n Written responses by consumers reference prices and inflation, tariffs and trade, and politics, with an increase in mentions of the\u00a0longest government shutdown in history<\/a>,\u00a0as factors affecting the economy, The Conference Board Chief Economist Dana Peterson said in a statement.<\/p>\n \u201cEven though the government shutdown technically hurt a small group of the population and those people will still get paid, I think the news is just in everybody’s ear all day long, and it gives people fear,\u201d Nepola said. \u201cAnd when people are scared, the first thing they do is stop spending.”<\/p>\n South Florida has fared better than most of the nation, with\u00a0one of the highest consumer confidence indexes.<\/p>\n<\/p>\n