May 30, 2024

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Shopping malls converted into residential units in South Florida – NBC 6 South Florida

Shopping malls converted into residential units in South Florida – NBC 6 South Florida

Miami's housing inventory remains about 37% below our region's historical average, according to a March report by Norada Real Estate Investments.

We simply don't have enough homes.

So how can we create more living space to meet the demand? A new solution is in the works throughout 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 mall serving food, food and fun.

But it is now deserted. Almost empty building with no foot traffic.

“It's no longer that we're just going to rely on retail outlets to bring people in, we need more things to get into the community,” realtor Brian Jorita said.

Gorita has been in the real estate industry for five years with over 20,000 followers on Instagram, and shares his insights on all the new real estate projects and changes happening in Miami.

He has been up to date on the latest mall redevelopments, including this one.

“From my perspective, they're still working on refining what the comprehensive plan will look like. The local government has made it clear they want to redevelop this. It's ugly right now and there's a lot of potential.”

Midtown Equities is the developer of the project. NBC6 attempted to contact them multiple times, but had not responded by phone or email at the time of this report.

But information about what the project could look like is still being finalized.

The city of South Miami says they are waiting for developers to submit their plans to the city, but expect mixed-use, residential and food and beverage offerings. Meaning that the project will contain units integrated into the site.

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Going south to Cutler Bay there is another project.

Southland Mall is already being redeveloped into Southplace City 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, and 60,000 square feet of medical offices. Space and runway.

The site is scheduled to be completed by 2029, with the first rental properties available in early 2025, creating approximately 2,700 new jobs.

The City of Cutler Bay reached out to NBC6 after the piece aired to provide updated numbers. As of April, the project will have 5,000 units. They added that they do not have a new completion date. While they expected to break ground on the first apartment building last year, they do not have a revised timeline for when the groundbreaking will take place.

“If you're a resident and you live in the South, why do you have to drive hours and hours to Brickell or Wynwood when you can get the same quality amenities and attractions right at your location,” Jorita said.

This transition from single retail spaces to mixed-use buildings is expected to be the future.

“This is happening because there is a huge demand for it. People want to work, live and play in the same place. They want to make it happen so that the communities involved can participate,” Jorita explained.

According to Forbes, the Urban Land Institute and the think tank of the National Multifamily Housing Council estimate that there are 1 billion square feet of legacy retail in the United States.

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In an analysis by JLL of 135 shopping mall redevelopment projects in the country, more than 50% involved housing. But these malls are not just becoming residential spaces: 85% of the projects in the analysis will retain on-site retail.

Why could flipping a mall be a good move?

“A lot of these malls are located in high-traffic, high-demand areas. They're well-located,” said Dr. Eli Peracha, director of Florida International University's Hollow College of Real Estate.

He explained that due to the emergence of online shopping, traditional shopping malls will soon become fewer and fewer. While empty spaces can be considered multi-use spaces due to their prime location, putting the idea into practice is not that simple.

“You have to remember that this doesn't mean we're occupying the space, we're changing the interior. In many cases, you're demolishing the space and rebuilding from scratch. It's very difficult to convert a shopping center into residential space just by changing the space,” Peracha said.

“Same for office space, the configuration, the way electricity flows, waste water etc. It is not suitable for properties in their current state. So, in many cases, it needs a complete rebuild, and that is not a change,” he added.

Site plans for these projects attempt to motivate Miami residents by promising a “small town” or “destination,” phrases that advertise a small city located just steps away.

Some sites like Palms at Town and Country do just that.

They recently announced that they will be converting the Coles Building into a 12-storey apartment building.

“Right now, in order to meet the needs of the community, we are going to have to step up,” Jorita said.

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“And this is the only option right now especially for a growing city. Is this a bad thing or a good thing? I don't think it's bad or good, I just think this is the new iteration of what Miami is destined to become and we have to be ready for that.”

The housing shortage has been an ongoing problem in Miami-Dade County, and shopping malls may be the only creative solution to using the land we already have, Goretta explains.

“Unfortunately, Miami has a problem when it comes to land availability, as we are pretty much confined to land. To the west we have the Everglades, the east is the beach, and to the south are the Keys, there is not enough real estate available for people to develop, which is why you see malls.” “Shops like this become habitats to support residents and they become employment centers, living centers, 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're buying in a high-priced area, you need to build up a margin, and you need to get your return back. In those areas, you'll still see high-priced luxury rental units coming in.”

“Of course, there are incentives like the Live Local Act that allows developers and local leaders to rezone industrial areas and shopping centers, so you can increase density and create more workforce housing and affordable housing for residents,” Jorita explains. “But unfortunately, from what I've seen here, we'll see A lot of the communities are rented, and a lot of them will be for rent.