Miami’s housing inventory remains about 37% below our region’s historical average, according to a March report from Norada Real Estate Investments.
Simply put, we don’t have enough houses.
So how can we create more living space to meet demand? A new solution is in the works across Miami-Dade County and it starts with malls!
Just off South Dixie Highway and Red Road is Sunset Place. Since its opening in 1999, it has been known as a bustling shopping center offering food, restaurants and entertainment.
But now it’s sorry. A practically empty building, with no foot traffic.
“We’re no longer going to rely on just retail outlets to bring people in, we need more things to come into the community,” real estate agent Bryan Gorrita said.
Gorrita has been in the real estate industry for five years with over 20,000 followers on Instagram and shares her views on all the new real estate businesses and changes happening in Miami.
He keeps up to date with all the latest mall redevelopments, including this one.
“From what I understand, they are still developing and refining what the overall plan will look like. The local government has made it clear that it wants to redevelop this site. It’s currently an absolute eyesore and has so much potential.
Midtown Equities are the developers of the project. NBC6 attempted to contact them several times, but did not receive a response via phone or email as of this writing.
But information on what the project might look like is still in the works.
The city of South Miami says it’s waiting for developers to submit their plans to the city, but it expects mixed-use, residential and dining offerings. This means that the project will have units integrated into the site.
Going south to Cutler Bay, there is another project.
Southland Mall is already being redeveloped into Southplace Town Center.
According to the City of Cutler Bay’s website, what is now a construction site will soon be converted into 4,000 residential units, 500,000 square feet of retail, 150,000 square feet of food and beverage options, a 150-key hotel, 60,000 square feet of medical office. space and an amphitheater.
The site is expected to be completed by 2029 and the first rental properties will be available in early 2025, creating around 2,700 new jobs.
The Town of Cutler Bay contacted NBC6 after the story aired to provide updated numbers. By April, the project will have 5,000 units. They added that they do not have a new completion date. Although they planned to break ground on the first residential building last year, they do not have a revised timeline for when the groundbreaking will take place.
“If you are a resident living in the South, why do you have to drive hours and hours to Brickell or Wynwood when you could have the same high-quality amenities and attractions right at home,” Gorrita said.
This shift from single retail spaces to mixed-use buildings should be the future.
“This is happening because there is a huge demand in this area. People want to work, live and play in the same place. And they want to make sure that the communities are involved,” explained Gorrita.
According to Forbes, the Urban Land Institute and the National Multifamily Housing Council Research Foundation estimate that there are 1 billion square feet of obsolete retail in the United States.
In a JLL analysis of 135 mall redevelopment projects nationwide, more than 50% included housing. But these shopping centers are not only becoming residential spaces: 85% of the projects analyzed will retain businesses on site.
Why might a mall flip be a good decision?
“Many of these malls are in high traffic areas and are in high demand. so they are well located,” said Dr. Eli Beracha, director of Hollo’s School of Real Estate at Florida International University.
He explained that due to the rise of online shopping, physical malls will soon become fewer and fewer. Although empty lots can be considered for mixed-use space due to their prime location, putting the idea into practice is not so simple.
“We must remember that we are not taking the space, but we are changing the interior. In many cases, you’re downsizing space and rebuilding from scratch. It’s extremely, extremely difficult to turn a shopping center into a residential space just by changing the space,” Beracha said.
“Same thing with the offices, the layout, the way the electricity flows, the wastewater, etc. This is simply not suitable for real estate in its current state. So in many cases a complete reconstruction is necessary, it is not a modification,” he added.
Site plans for these projects attempt to entice Miami residents by promising a “mini-city” or “destination,” phrases that herald a mini-metropolis just steps away.
Some sites like Palms at Town and Country do just that.
They recently announced they would be transforming the Kohls building into 12-story apartment buildings.
“Right now, in order to meet the needs of the community, we’re going to have to go up,” Gorrita said.
“And it’s the only option right now, especially for a growing city.” Is this a bad or a good thing? I don’t think it’s good or bad, I just think this is the new iteration that Miami is destined to become and we need to prepare for it.
Gorrita says the lack of housing is an ongoing problem in Miami-Dade County and shopping centers might be the only creative solution to utilizing the land we already have.
“Unfortunately, Miami has a problem when it comes to land availability, where we are virtually landlocked. To the west we have the Everglades, to the east the beach, and to the south the Keys. There’s not enough real estate available for people to expand, and that’s why you see malls like this becoming habitats to support populations and they becoming work centers and centers of life and quite simply everything.
The big question is how much will these rental units and apartments cost?
“You have to put yourself in the developer’s shoes. If you buy in a high price area you have to make a margin, you have to get your ROY back. In these areas, you will still see high-priced luxury rental housing,” he says.
Gorrita explains: “Of course, there are incentives such as the Live Local Act which allows developers and local leaders to rezone industrial areas and shopping centers, in order to increase density and create more housing for the workforce -work and affordable housing for residents. But unfortunately, from what I’ve seen here, we’re going to see a lot more rental communities, and a lot of them will be for rent.
