Coconut Grove has long played an important role in Miami’s transformation into a bustling metropolis.
Discovered in the early 19th century by mariners attracted to bubbling freshwater springs along its coastline, it was one of the city’s earliest settlements founded by maritime traders from the Bahamas and Europe. After its official founding in 1873, Coconut Grove went through several evolutions during the next 100 years to become a tropical oasis for artists, intellectuals and modern-day swashbucklers.
By the 1980s, the bohemian village began another metamorphosis into a hangout for teenagers cruising through Main Highway and Grand Avenue and college students partying at local bars and nightclubs. In 1990, the open-air retail center CocoWalk opened its doors, signaling a push to make Coconut Grove more commercial by bringing in national chains like The Gap and AMC Theaters.
However, competition during the early 2000s from burgeoning neighborhoods and retail districts in Brickell, South Miami and Coral Gables severely impacted Coconut Grove’s commercial appeal, driving tourists and locals away. There was also a lack of new residential development, causing buyer interest to wane in the neighborhood.
“I have worked in the Grove for the last seven years,” said Karen Elmir, a Realtor associate with Cervera Real Estate. “The market for condos was almost non-existent. It was hard to sell anything above $800 a square foot.”
Signs of Change
Coconut Grove’s outlook began to improve in 2012, when Terra unveiled plans to redevelop the former site of the Grand Bay Hotel into a pair of twisty luxury towers designed by Bjarke Ingels. The company completed the 20-story buildings, called Grove at Grand Bay, and sold out the project’s 96 residences last year.
“New preconstruction prices are selling at $1,000 a square foot,” Elmir explained. “Five years ago, those prices were unheard of.”
She noted the market for single-family homes in Coconut Grove has also skyrocketed, with prices for those properties jumping 20 percent over the past five years.
The influx of luxury condo buyers has given commercial developers the confidence to take risks on underperforming retail and office properties in the Grove. Upon acquiring CocoWalk for $87.5 million in May 2015, the joint venture between Federal Realty Investment Trust, Grass River Property and the Comras Company announced plans to revamp the four-story, 198,000-square-foot shopping center’s retail mix in order to cater to the neighborhood’s new demographics.
The owners are now planning to construct a 78,000-square-foot Class A office building on the site, which they hope will boost daytime foot traffic and create a built-in customer base for CocoWalk’s retailers and restaurants. Renovations to the existing retail spaces are already underway.
Comras has also brought in new retailers to the Engle Building at 2980 McFarlane Road. In 2015, an entity owned by Arquitectonica founder Bernardo Fort-Brescia, his son and another relative renovated the property. Since then, Comras has brought in tenants such as Harry’s Pizzeria, Panther Coffee, Buro Group, Bonobos, Le Pain Quotidien and Poke305. Books & Books is opening an outpost on another major Grove Street at 3409 Main Highway.
The changing retail landscape has caused occupancy and rental rates to slip over the past 12 months. According to a Q3 2017 retail report by JLL, the occupancy rate dropped 1.1 percent to 97.5 percent compared to the same period in 2016. Asking rents took a dive from $66.30 a square foot last year to $62.78 a square foot in the third quarter.
Transportation
The city of Miami offers a free trolley service throughout Coconut Grove that also takes riders to the Coconut Grove Metrorail Station near US1 and Southwest 27th Avenue.
Residential developer’s take
“Safeguarding Coconut Grove’s urban character means creating sustainable developments, walkable streets, and a healthy mix of commercial and residential uses that allows people to live and work in close proximity,” David Martin, CEO of Terra.
Brandon Baker, CryptoSizzle
