New deals in luxury retail space, such as the recent deal between General Growth Properties, Inc., Ashkenazy Acquisition, and Miami Design District Associates are indicative of a larger shift in luxury retail markets. Retailers are moving away from traditional shopping malls (which have shown slow growth in recent years) in favor of “high street” retail, including places like Fifth Avenue in Manhattan and the Michigan Mile in Chicago. Now, these types of developments are becoming the new trend in other cities, such as Atlanta’s Buckhead neighborhood and Miami’s Brickell and Design Districts.
These developments are betting on the idea that wealthy consumers, and therefore luxury retailers, are looking for a different type of experience when they shop. Increasingly, these areas are growing as mixed-use developments, often with multi-family and condo housing units included. Along with retailers like Valentino, Tiffany, and Dior, these new “high street” retail developments are attracting fine art and cuisine. Miami’s Design District will feature a new Institute of Contemporary Art (joining the de la Cruz Collection Contemporary Art Space), as well as a version of chef Jean-Georges Vongerichten’s ABC kitchen. Despite this shift in retail, “high street” developments such as this do still face competition, even from shopping malls. For example, Miami’s Bal Harbour Shops, a large open-air mall, is set to add 300,000 square feet of space to its already existing 500,000. However, the focus here is in expanding the size of existing stores rather than bringing in new ones. While this is positive for Bal Harbour for the time being, the rise of high street retail shops could be the beginning of a larger shift in the way consumers choose to do their retail shopping.