Miami-Dade County’s epicenter of the cool and the hip is getting practical: A Target store is coming to South Beach.
The retail giant will open one of its “flexible format” stores — smaller-than-normal Targets catering to a younger demographic and in-store-pickup online shoppers — at the “BLVD at Lenox” retail development by the Comras Company at 1045 Fifth St. in Miami Beach.
The new shopping center will occupy the current location of the now-shuttered Ivy nightclub, which will be demolished. Groundbreaking is scheduled for early 2018 and construction will be completed by spring 2019.
The Target mini-store will measure 33,000 square feet. Regular big-box Target stores in suburban areas range in size from 120,000 to 200,000 square feet.
Target will be the anchor tenant of the four-story, 67,000 square-foot BLVD project, which will include 227 parking spaces and 27,000 square feet of ground-floor subdivisible retail space for smaller service-oriented tenants such as banks, gyms, casual restaurants and telecommunication companies.
The BLVD project will sit just east and across the street from the shopping center at 1100 Fifth St. that greets motorists entering Miami Beach via the MacArthur Causeway. That center currently houses Publix, Best Buy, Total Wine, T.J. Maxx and Ross Dress for Less stores.
“Retailers are having to change the way they think about brick-and-mortar stores,” said Michael Comras, founder of the Comras Company, the real estate development and brokerage firm that specializes in retail and is currently overseeing the renovation of CocoWalk in Coconut Grove. “Target has changed their entire program. They’re now going into smaller urban markets where they can take on the role of a community store, because they are competing against online retailers. These smaller stores sell products customized to their area.”
The retail industry continues to struggle to reinvent itself in the digital area, with more than 6,300 store closures announced this year alone by various national chains. Target shares have dropped nearly 20 percent in 2017, from $72.75 on Jan. 3 to $60.43 as of Nov. 13.
Earlier this month, Target announced it will close 12 of its underperforming stores in nine states on Feb 3, 2018, including the Lauderhill location at 7730 W. Commercial Blvd. The company will announce its 2017 third-quarter earnings on Nov. 15.
To combat waning foot traffic, Target is remodeling some of its existing stores, signing brand-name exclusives and emphasizing online sales. Target has also been pushing its small-format stores since 2016 in markets such as New York City as a way to reach shoppers in densely-populated urban areas and college communities.
The company plans to have 130 mini-locations in operation around the U.S. by the end of 2019.
“Target has been seeking the ideal location for a small-format store in Miami Beach, so we’re thrilled to be part of the BLVD at Lenox shopping complex to conveniently serve residents and tourists with a unique product assortment that only Target can provide,” Target senior vice president of properties Mark Schindele said in a statement.
Some South Beach property owners are having difficulty finding tenants who can afford their high rents. According to Colliers International South Florida, the vacancy rate on Lincoln Road, the iconic 10-block open-air mall that stretches from Alton Road to Washington Avenue, currently stands at 13 percent — up from 8.5 percent in 2016 and 5.4 percent in 2015.
But while luxury retail struggles, some analysts say Target and South Beach are a good fit, filling a void pricey shops cannot.
“There’s a big demand for this kind of store, even though South Beach is very focused on expensive, high-end retail,” said Noa Figari, vice president of urban core leasing for Colliers International South Florida. “There are a lot of wealthy communities on South Beach, such as the area south of Fifth Street. But there are also still a lot of regular communities here full of people who will take advantage of a Target store, and the location is excellent. They will do very well.”
The South Beach location will be Target’s second mini-store location in Florida. The first one opened in Gainesville earlier this year.