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Whole Foods pulls out of Met Miami project
Whole Foods has pulled the plug on plans to open a grocery store at the Met Miami project in the city’s downtown, but the developer hopes to fill the vacancy with another supermarket in the future.
Changes in the construction schedule at the mixed-use project – which includes offices, condos and a hotel – figured into the decision, said Russ Benblatt, Whole Foods’ regional marketing director for Florida.
“We are out of that project,” Benblatt said. “It was the project changing that precluded us from being there.”
Although thousands of new residents are living in downtown Miami as a result of a wave of condo construction, there are few amenities and there is no major supermarket in the downtown area. There are also plenty of highrise condominiums with lots of unsold units.
Whole Foods, based in Austin, Texas, has an aggressive growth strategy, which likely influenced its decision to get out of Met Miami. The company has opened five stores in Florida since September 2007, including its Coral Gables location.
“From the onset, our vision for Metropolitan Miami was to have a food market as part of Met 3. We respect Whole Foods' decision, and will look to continue an open dialogue with the organization with the goal of a possible relationship in the future," said Tim Weller, vice president for builder MDM Development Group.
"That said, our goal continues to be having an agreement in place with a food market when the first phase of Met 3 breaks ground at the end of 2009,” Weller added.
Weller told the Business Journal in September that he planned to start construction on the 14-story Met 3 garage, where Whole Foods was planned, in June. The market was to open in spring 2011, he said.
Jeremy Larkin, president of NAI Miami Commercial Real Estate Services Worldwide, said he wasn’t shocked, considering the revenue hit that retail has taken nationally.
Larkin, who is not involved in the project, said downtown Miami had not matured fast enough to accommodate Whole Foods’ revenue model and the project’s changes gave them an out on their contract.
“In order for them to be successful, they need affluent people to spend dollars for premium foods,” Larkin explained. “The narrow margin of people that exist are on the bay and there aren’t enough to support a Whole Foods operation.”
Larkin said every retailer with a deal in progress is renegotiating with their landlord to get a 10 to 20 percent reduction in their rent. If the deal is in an average neighborhood, retailers are killing them.
“Virtually no new project is going to work except in mature, healthy, economically viable areas,” Larkin said.
Larkin predicted Whole Foods would be in downtown Miami in five to seven years, when the market matured.
Neisen Kasdin, vice chairman of the Miami Downtown Development Authority, said he didn’t know that Whole Foods had decided to go in a different direction. He said it’s a disappointment, but he is confident another market will fill the void to meet the demand created by residents who are already downtown.
Benblatt said Whole Foods was continuing to look for sites in Miami.
“We want to be part of Miami,” Benblatt said. “We just want to find a site that fits for us at all angles.”
The real estate downturn had already taken a toll on the project. Met 3 was to feature a 74-story residential tower with 650 units, but that plan is on hold.
MDM has completed Met 1 on the east side of the three-block site. Closings at the 40-story, 447-unit residential tower have been slower than expected, with buyer financing the biggest hurdle to closings.
MDM has begun construction on Met 2, its office and hotel phase that includes a 1,450-space garage. The 750,000-square-foot office building has the law firm Greenberg Traurig as its anchor tenant.
Met 2 also will feature a 358-room hotel with two Marriott hotel brands. Marquis will have 313 rooms, with luxury flag Hotels Beaux Arts serving 45 suites. Construction is expected to be completed by October 2010.
Met Square, the four-story entertainment complex located between Met 1 and Met 2, is slated to start construction in June, with a completion date of October 2010.
Full Article:
http://www.bizjournals.com/southflorida/stories/2008/12/29/daily17....
Changes in the construction schedule at the mixed-use project – which includes offices, condos and a hotel – figured into the decision, said Russ Benblatt, Whole Foods’ regional marketing director for Florida.
“We are out of that project,” Benblatt said. “It was the project changing that precluded us from being there.”
Although thousands of new residents are living in downtown Miami as a result of a wave of condo construction, there are few amenities and there is no major supermarket in the downtown area. There are also plenty of highrise condominiums with lots of unsold units.
Whole Foods, based in Austin, Texas, has an aggressive growth strategy, which likely influenced its decision to get out of Met Miami. The company has opened five stores in Florida since September 2007, including its Coral Gables location.
“From the onset, our vision for Metropolitan Miami was to have a food market as part of Met 3. We respect Whole Foods' decision, and will look to continue an open dialogue with the organization with the goal of a possible relationship in the future," said Tim Weller, vice president for builder MDM Development Group.
"That said, our goal continues to be having an agreement in place with a food market when the first phase of Met 3 breaks ground at the end of 2009,” Weller added.
Weller told the Business Journal in September that he planned to start construction on the 14-story Met 3 garage, where Whole Foods was planned, in June. The market was to open in spring 2011, he said.
Jeremy Larkin, president of NAI Miami Commercial Real Estate Services Worldwide, said he wasn’t shocked, considering the revenue hit that retail has taken nationally.
Larkin, who is not involved in the project, said downtown Miami had not matured fast enough to accommodate Whole Foods’ revenue model and the project’s changes gave them an out on their contract.
“In order for them to be successful, they need affluent people to spend dollars for premium foods,” Larkin explained. “The narrow margin of people that exist are on the bay and there aren’t enough to support a Whole Foods operation.”
Larkin said every retailer with a deal in progress is renegotiating with their landlord to get a 10 to 20 percent reduction in their rent. If the deal is in an average neighborhood, retailers are killing them.
“Virtually no new project is going to work except in mature, healthy, economically viable areas,” Larkin said.
Larkin predicted Whole Foods would be in downtown Miami in five to seven years, when the market matured.
Neisen Kasdin, vice chairman of the Miami Downtown Development Authority, said he didn’t know that Whole Foods had decided to go in a different direction. He said it’s a disappointment, but he is confident another market will fill the void to meet the demand created by residents who are already downtown.
Benblatt said Whole Foods was continuing to look for sites in Miami.
“We want to be part of Miami,” Benblatt said. “We just want to find a site that fits for us at all angles.”
The real estate downturn had already taken a toll on the project. Met 3 was to feature a 74-story residential tower with 650 units, but that plan is on hold.
MDM has completed Met 1 on the east side of the three-block site. Closings at the 40-story, 447-unit residential tower have been slower than expected, with buyer financing the biggest hurdle to closings.
MDM has begun construction on Met 2, its office and hotel phase that includes a 1,450-space garage. The 750,000-square-foot office building has the law firm Greenberg Traurig as its anchor tenant.
Met 2 also will feature a 358-room hotel with two Marriott hotel brands. Marquis will have 313 rooms, with luxury flag Hotels Beaux Arts serving 45 suites. Construction is expected to be completed by October 2010.
Met Square, the four-story entertainment complex located between Met 1 and Met 2, is slated to start construction in June, with a completion date of October 2010.
Full Article:
http://www.bizjournals.com/southflorida/stories/2008/12/29/daily17....
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