Florida has long been regarded as a vast, sun-splashed playground where the more pedestrian concerns of everyday life are all but forgotten. In truth, living in Florida may not always be a day at the beach. Yet thousands of people, oblivious to factors such as rising interest rates and doomsday forecasts regarding the potentially catastrophic consequences of continued overbuilding, are pulling up stakes to migrate into the Sunshine State, lending credence to the adage that there is no such thing as a native Floridian.
With a total population numbering in excess of 15 million, Florida is consistently growing by about 1.5% a year. That makes it one of the fastest-growing states in the United States. Not surprisingly, Florida's residential real estate market seldom has been hotter. Since May 1999, overall home sales have increased by 12%. On an equally positive note, household income this year is forecasted to grow a solid 2.7%.
With these combined factors working in its favor, retail development, needless to say, will continue apace. And that, of course, is goodfor developers. Foregoing for the most part the power centers that once proliferated, many developers are focusing instead on creating mixed-use lifestyle centers or villages. With the public's growing disenchantment with having to rely heavily on their automobiles - especially in light of current gas prices - it appears that the concept well may be one who's time has come. George de Guardiola, president and partner of West Palm Beach-based de Guardiola Development, says: "There is an identifiable trend for centers to become less automobile oriented and more people oriented. At this point, (mixed use centers) definitely are the most profitable." Indeed, there is no question that the projects, with their open-air common areas for concerts, art shows and other such events, are far more conducive to mingling and socializing than their sprawling, impersonal counterparts.
Jacksonville If lifestyle centers are in fact the wave of the foreseeable future, then it's not surprising that developers are scrambling to position their projects to take advantage of the best of all possible markets. Nowhere is that more apparent than in Jacksonville. Since the mid-1990s when the city was awarded its first professional football team, Jacksonville has enjoyed heightened status. Overall, the River City is growing at a consistently steady pace. And it's good growth. REIS Reports Inc., a New York-based company that tracks real estate trends, estimates that Jacksonville's vacancy rate will average 5.7% through 2003. That's considerably lower than the national average of 6.4%.
The city's growth should also work in its favor. The population of its largest county, Duval, is now 772,520; by 2010, that number is projected to reach 860,113. For Jacksonville and surrounding areas, May 2000 residential sales increased 26% over May of last year (surpassed only by the Fort Pierce-St. Lucie area with a 30% increase and Miami with a 28 % increase).
Eager to capitalize on the city's markets, two retail developers, Ben Carter, head of Atlanta-based Ben Carter Properties, and The Goodman Co., based in West Palm Beach, recently unveiled plans to construct lifestyle centers in Duval County, on the city's bustling Southside. Carter's project, Deerwood Town Center, will be constructed on 175 acres of farmland at the intersection of Butler Blvd. and St. Johns Bluff.
If the developer has his way, the $320-million project will introduce to the Jacksonville market such upper-crust retailers as Lord & Taylor, Nordstrom, Neiman-Marcus and Saks Fifth Avenue. The center will encompass 1.2 million sq. ft. of retail and restaurant space; 400,000 sq. ft. of office space; a 200-room hotel; and 450 apartments, combining traditional family-style units and lofts. Upon completion in 2003, the project is expected to be the third-largest retail center in Northeast Florida, exceeded in size only by Regency Square Mall and The Avenues, both also in Jacksonville.
Meanwhile, The Goodman Co. already has begun compiling a list of potential tenants for its new lifestyle center, to be constructed at the Southside's Freedom Commerce Center. Strikingly similar to Carter's project, the $200 million, open-air mall, as yet unnamed, will encompass 1.2 million sq. ft. of stores and restaurants; 2.5 million sq. ft. of office space; 450 apartments; and a 600-room hotel.of some of the retail portions is set to begin next spring and be completed by 2002, giving the project approximately a 15 month jump on Deerwood Town Center.
Despite the admitted scope of both projects, there's evidence to suggest that the city will, in fact, be able to support both. "We're seeing more of the higher-end jobs coming in, and that entices the high-end retailers to come in," says Brian Platock, vice president of retail properties for CB Richard Ellis in Jacksonville.
Nor will the centers be hurt by their proximity to neighboring St. Johns County, home of tony Ponte Vedra Beach, which enjoys the distinction of being one of the most affluent areas in Northeast Florida. A hotbed of continuing development, Ponte Vedra encompasses a total of 51.1 square miles. Average income within three miles of Players Championship Boulevard off A1A (main artery of one of the area's principal gated communities and annual site of the prestigious Players Championship golf tournament) is $140,000 per capita. Five miles out, that figure drops to about $105,000.
The Avenues, a 1.3 million sq. ft. power center constructed at the intersection of Southside Boulevard and Phillips Highway in 1990 that, retail-wise, heretofore has been one of the few games in town, already is gearing up for the new competition that will be moving in just down the road. Beginning Jan. 1, 2001, the mall will spend $6 million renovating its Belk's store, one of five anchors including Dillard's, JCPenney, Parisian, and Sears.
The renovation of the 200,000 sq. ft. store, expected to be completed by next summer, will follow an $18 million renovation and expansion of the store at the city's Regency Square Mall that was completed in August 1999. The nation's largest privately owned department store, Belk's plans to renovate another Florida store as well as build five new stores throughout the state. At a total cost of $20 million, the new stores will be in Lake City, Deland, Lady Lake, Winter Haven, and Spring Hill. They should be completed within the year.
It comes as little surprise that Jacksonville is experiencing an increase in rents. Typically, strip and power centers are beginning at about $11.50 per sq. ft., while new centers are starting at $14 per sq. ft., and running anywhere from $14 on up to $18. Regional malls are averaging about $20 per sq. ft.
Orlando If retail development in Jacksonville is beginning to sizzle, then in Orlando, it is already a resounding snap, crackle, pop. After slowing in the early months of 1999, the city's economy ended the year - and the decade - with a bang. In terms of convention business, Orlando surpasses even Atlanta. Driven largely by retail trade, services and one of the largest tourist industries in the United States, the gross metropolitan product in 1999 grew by 2.7%. Population continued to grow, recently passing 1.5 million and making Orlando the fifth fastest growing major metropolitan area in the country.
Job-wise, the news was equally good. The city's job market expanded by 6%, with total employment reaching 850,000. The tourism sector, already booming, expanded even farther, with two major new theme parks, two new retail/entertainment districts, and more than 10,000 new jobs. Unemployment dropped to 3.5%, while per capita income grew by 4%.
With more than 3.5 million sq. ft. of space added to the retail market in 1999 (35% of which was in the form of entertainment districts), it's not surprising that Orlando's retail sales are running 21% higher than those nationally. Vacancies are between 5 and 8%. According to Margo Thomas, CSM/CMD retail associate for CB Richard Ellis in Orlando, some submarkets actually are between 98 and 100%.
In terms of specialty shops, two new anchors, Burdine's and Nordstrom, were introduced into the Orlando market in 1999, at The Florida Mall, a regional power center managed by the Indianapolis-based Simon Property Group. Bloomingdale's and Macy's also made their entry into the market, opening at the upscale Emporio Orlando, a 1.2 million sq. ft. regional center off Conroy Road and I-4 developed by The Forbes Co., Southfield, Mich., and Taubman Centers Inc., Bloomfield Hills, Mich.
With the opening of the Millennia Mall, a million sq. ft. mega-center also under construction on I-4, even more high-end retailers will be moving into the area. With anchors that include Bloomingdale's, Macy's and Neiman-Marcus, the new center's location will make it easily accessible to tourists as well as locals, Thomas says.
Phase One of Waterford Lakes Town Center, a 1.2 million sq. ft., open-air project developed by Indianapolis-based Simon Property Group, opened last summer on State Road 435 in east Orlando, one of the city's principal growth areas.
Meanwhile, on International Drive in west Orlando, one of the city's primary tourist draws, construction has begun on Festival Bay. This one million sq. ft. enclosed mall with a multiplex cinema will be part of the Belz Factory Outlet and will bring into the area well-known tenants such as Ron Jon's Surf Shop. "The main thing impacting our growth on the west side is the completion of the first phase of the western beltway, which will be completed in its entirety by 2005. Once the roads and transportation are available, residential (development) begins, and retail follows," Margo Thomas says.
Absorption of new space in 1999 kept vacancies in Orlando steady at an average of 11.4% for the year. This year, however, heavy pressure from completions could drive that figure upward. During 1999, rents grew more than 4% to average $14.80 per sq. ft. gross for the year. But upward pressure on vacancy is expected to keep rents flat in all but the most desirable areas.
As for which merchandising categories were responsible for bringing in the lion's share of profits in 1999, Thomas points to those retailers whose products reflected not only the coming of age of baby boomers, but the tendency toward cocooning of society in general. "Your Targets, your Home Depots, your Lowe's - those are the (ones) that just keep on keeping on."
Tampa With a tourist trade that continues to lag behind that of neighboring vacation goliaths Orlando and Miami, Tampa Bay's housing boom of the past decad e still gave the area plenty of reason to celebrate. Hailed the number one city in the Southeast for large job announcements (including 10 totaling more than 12,000 jobs), unemployment in 1999 reached a low of 3.4%, and median household income grew by almost 2%; that number this year is expected to jump to 2.2 %. "We definitely are on a steep part of the growth curve," says David Conn, senior vice president, retail group of CB Richard Ellis in Tampa.
If, from a retail standpoint, the city still takes a back seat to Orlando, the Tampa of the 21st century is gearing up to do everything in its power to give its Disney-esque neighbor to the north a run for its money. Much like Orlando, in 1999 malls and entertainment dominated the city's retail picture. Construction completions totaled 2.6 million sq. ft., including 750,000 sq. ft. of entertainment districts. Vacancies leveled off near 8.9%, while rents averaged $13.60 per sq. ft. in 1999.
This year, it's predicted that:
* Construction starts will slow to 2.4 million sq. ft.
* Vacancies will rise slightly, to 9%.
* Rent growth will slow to 1% as the gap between new supply and demand widens.
ORIX Real Estate Equities, Inc., and the Tampa-based Hogan Group's 210,000 sq. ft. urban entertainment and specialty retail center, Channelside at Garrison Seaport, was completed this past spring. With 56,000 sq. ft. of restaurants and 97,000 sq. ft. of retail, the center is located on 4.5 acres of property along Garrison Channel in the Port of Tampa district of downtown. It is next to The Ice Palace and in close proximity to the cruise ship terminals, to take maximum advantage of the five million visitors annually to the city's downtown waterfront. Anchored by a 15-screen Regal Cinema and IMAX Theatre, tenants include Aztec Cafe, Charley's Crab, Max's Grille, Starbuck's, and the Gap.
In the popular Ybor City district, The Sembler Co., along with Miami-based Steiner + Associates, recently completed construction of Centro Ybor, a restaurant/retail/movie complex featuring 214,000 sq. ft. of retail space. A St. Petersburg-based developer of shopping centers and grocery stores, Sembler also is working on a similar project in downtown St. Petersburg, to be known as BayWalk.
Near Tampa International Airport, the Taubman Co. is developing International Plaza, an upscale, 1-million-plus sq. ft. center that, in a unique departure, connects a village design into the project's second level. Upon completion in September 2001, the center will be anchored by Nordstrom, Neiman Marcus, Lord & Taylor and Dillard's.
The project will be going head-to-head with WestShore Plaza, an upscale center nearby that boasts Tampa's first Saks Fifth Avenue. Currently undergoing a $100 million expansion in preparation for the newcomer, completion of which is set for fall 2000, the center is managed by The Wilder Cos. Ltd., headquartered in Boston.
CVS Drugstore, out of Providence, R.I., will enter the Tampa market this year, in a bid to compete with Walgreen's and Eckerd's. Departures from the market, meanwhile, include Robard's and Jumbo Sports, national chains both of which have filed for bankruptcy.
Miami In Miami/Dade County, the current hike in interest rates, coupled with an occupancy rate of 100%, has been instrumental in slowing the demand for retail development. In addition, there's simply not that much land still available. "We're not seeing that many closings, right now. The buyers are unwilling to pay the (price), and the sellers are holding out for more money," noted Doron Valero, COO of Equity One, based in North Miami. Consequently, "You don't have many retailers jumping to the new big boxes," Valero added.
The recent proliferation of dot com and internet companies "obviously has taken its toll" on development of power boxes, admits Valero. "When the parts are moving and you don't know exactly where they are going, it's safer to lean more toward service and entertainment - and that, I think, is what most people aredoing... Hopefully, at the end of the day we will have more service- and entertainment-oriented tenants, than the typical soft goods shoe store."
To that end, in a bid to spark activity in slumbering North Beach (Collins Avenue in that area is 50 % vacant), Equity One has begun construction of The Point at North Beach. This 180,000 sq. ft. retail/entertainment center will be located between 72nd and 73rd streets and anchored by a 51,000 sq. ft. state-of-the-art Publix supermarket. Along with an 80,000 sq. ft. theater for live productions, 35,000 sq. ft. is targeted for retail and restaurant space and a 900-space parking garage. Groundbreaking is set for April 2001, with completion slated for November 2002.
In the City of North Miami, the company recently completed Phase Two of the Shops at Skylake, a 280,000 sq. ft. project with 20,000 sq. ft. of office space that will be anchored by a 51,000 sq. ft. Publix. Phase Three of the project is now under construction.
In nearby Broward County, the ratio of retail space to population at this point generously exceeds the national average. Rental rates in 1999 experienced a substantial increase, while vacancy rates declined. At the southwest corner of Federal Highway and Copans Road in Pompano Beach, the LEFMARK Group, specialist in retail development, has begun a major overhaul on Pompano Square Mall, an existing 850,000 sq. ft. regional power center.
Along with four to six new restaurants, the project also will include a major supermarket, pharmacy, fitness center, bookstore, and apparel, shoe and homewares retailers. Project designer is Lawrence Levison and Associates.
Waterford Lakes Town Center in Orlando has as many personalities as there are palm trees swaying in the warm Florida breeze. Myles H. Minton, vice president, community centers development of Indianapolis-based Simon Property Group, explains the concept behind the largest open air center in Florida. "We're taking the best of the market demand, putting it all into one environment and doing the venue the way the customers want it."
The residents of Orange County are eager to accept this attention. This area of Florida has been relatively untapped by retail for some time. However, the demographics spell success. The average customers are young professionals, 32 years old, with one child and an average income of $60,000. Florida State University, a 40,000-student campus, is located within a few miles of the site and attracts these soon-to-be young professionals. Those traveling from the heart of downtown Orlando will arrive at this East Coast hot spot in 15 minutes. A short trip time, coupled with the extensive range of quality tenants, is making people flock like flamingos.
The first phase opened in October 1999 and is fully leased, housing such big players as SuperTarget, Barnes & Noble and Regal Cinemas 20-Plex. The second phase is 75% leased and due to open in November with the remaining 150,000 sq. ft. opening in spring/summer 2001. The goal for this center, apart from distinguishing it from others, was to condense everything in order to achieve a small-town feel with big-town service.
Fulfilling the needs of Simon was Charles Hodges, principal of Dallas-based architects Hodges & Associates. "The charge that Simon gave our team was to make this a much more personalized campus, with a pedestrian scale and highly animated building facades rather than [the average] continuously playing lulls that you see in a lot of power centers," says Hodges. The use of theme areas within the center, including The Boulevard, The Patio and The Zone, conspires to create a unique shopping atmosphere.
Michael E. McCarty, president, community centers division, Simon Property Group, describes The Boulevard as "a lifestyle center within the (entire) project." This area is full of high-energy tenants, such as Barnes & Noble and Gamestop, that capitalize on entertainment and recreation.
The Patio is adjacent to The Boulevard and offers such industry giants as Cheesecake Factory, Romano's Macaroni Grill and T.G.I.Fridays. Swirling around the plethora of outdoor eateries is the incorporation of bicycle paths; adding to the riders' convenience are bike racks, compressed-air pumps, water spigots and even personal lockers.
The Zone, opening within phase two, is specifically designed for children. The focal point of this area is the 8,200 sq. ft. Oxford Daycare Academy. A 7,500 sq. ft. outdoor play yard will beckon the children as parents come to a halt under the extra-wide (for added security), covered drop-off lane. Exemplifying the thoughtfulness of The Zone project and its tenants, a residential 'Slow, Children Playing' sign safeguards this kiddy paradise.
These accomplishments were not achieved without a fair share of challenges. The first obstacle was validating the research showing retailers the growth that surrounds the Waterford Lakes Town Center site. The population in the east Orlando area is expanding at a face pace, making the market growth potential outstanding. Once this had been confirmed, the number of tenants rose dramatically.
As the project progressed, laying out the property in a way that is consumer friendly was the next challenge. "A lot of synergy was used in our merchandising and our layout. When you have 113 acres, you can have a lot of flexibility," says McCarty. "We have the tenants in the right place." For example, Children's Place is located next to Chuck E. Cheese, which is next to Petland.
This multi-personality shopping center also had its architectural challenges, including "trying to encourage some of the anchor stores to go vertical rather than horizontal to defeat overall distance between buildings," explains Hodges. In addition to building placement, another challenge was constructing walkways across parking areas. These crosswalks serve as a link between buildings aiding in the overall consolidation of the center.
The use of themes and 'extras' adds to the unique architectural design of Waterford Lakes Town Center. "I think all of these things are Simon's statement that they really are interested in creating a different atmosphere [within a large center] for their patron," says Hodges.
The newest entry in the Florida retail sweepstakes is Dolphin Mall, a two-level project by Bloomington Hills, Mich.-based Taubman Co. and Hollywood, Fla.-based developer Michael Swerdlow. The 1.4 million sq. ft. center is currently under construction at the intersection of Dolphin Expressway and the Florida Turnpike, five miles from the Miami International Airport. It is already 80% leased with an opening date of March 1, 2001. "Because of the proximity to the airport, we expect tourism to be a dominant factor" in the success of Dolphin Mall, says Karen McDonald, Director of Communications for Taubman. In fact, special shuttles will take customers to and from the airport, allowing Dolphin Mall to capitalize on long layovers by international passengers.
To be more specific, Taubman is marketing Dolphin Mall heavily to Latin American tourists. As reported in SCW's May 1998 issue , South American tourist dollars are a big part of the retail environment in south Florida, with as many as 40% of all mall visitors coming from South America. According to the Greater Miami Convention and Visitors Bureau, 80% of Latin American visitors list shopping as their favorite reason to come to Florida, and Sawgrass Mills in Sunrise reports that the average South American customer spends a whopping $1000 per visit.
Of course, south Florida's indigenous culture is also heavily Hispanic, so Taubman wanted to make the very design of the mall reflective of Latino culture. To accomplish this daunting task, the company went to Boulder, Colo.-based designer Communication Arts, who worked with Beame Architectural Partnership on the project.
Besides little touches like bilingual signage, the Dolphin Mall project was built around what Communication Arts considers the five primary values of Latino culture: tradition, family, public life, courting, and individual expression. "Miami is really the northernmost city in Latin America," notes project principal Henry Beer of Communication Arts, who says "there isn't a design element in the entire project that isn't calibrated to give a very strong Latin flavor."
Based on a Mills-like racetrack layout - Beers himself says that "any time you have a racetrack layout, it is absolutely and profoundly influenced by The Mills" - the mall itself is split into zonas that reflect different attributes of Latino society. The first zona visitors to Dolphin Mall will see is the Ramblas, a strolling and people-watching area located by the main entrance, which lead designer Taku Shimizu says tries to capture "the energy of the street." Storefronts are more like what one would see on a city street than standard mall fare, and the floors mimic city sidewalks. Shimizu calls the Ramblas "a place to see and be seen, and not just walk off your meal." Entertainment is the theme in this zona, and the mall's entertainment-oriented anchors such as Regal Cinemas and Dave & Buster's are located here.
Another zona is Playa, Spanish for beach, which commemorates Florida's association with sea and sand. This zona is focused on leisure, and features such anchors as Oshman's Supersports USA. The Atrio, a larger, more open version of a food court, is also located here. On one side of this zona there are Art Deco storefronts patterned after the fashionable South Beach area. As you cross to the other side, the floor gradually changes from off-white (sidewalk) to tan (sand) to aqua (water). Here you find small cabana-like storefronts that reinforce the beach theme.
Perhaps the zona that best reflects Dolphin Mall's take on Latino customs is Moda, which loosely translates as style. "How you have crafted your public style is very important" in Latino society, says Beer, and Moda is designed to facilitate a very public display of style. In this zona, everything from the storefronts to the terrazzo tile underfoot is white, creating a sort of blank slate where, as Shimizu says, "the two most important things are the merchandise and the people." This area will also have flattering lighting and numerous mirrors where the fashionable can admire themselves, and each other. Large clothing and apparel anchors such as Burlington Coat Factory and Marshall's, as well as a variety of smaller specialty shops, find their home here.
"We were actually really excited to find that there wasn't a large entertainment/value center in Miami-Dade County," says Dolphin Mall General Manager Barbara Kreuser, who notes that nearby malls like Dadeland and Miami International are very different than Dolphin. When pressed for a similar center in Florida, she mentions Sawgrass Mills in Sunrise, but considering that it is some 30 miles away in Broward County, she doesn't seem worried.
Miami Beach, a.k.a. South Beach, is home to more than 94,000 permanent residents, but the population swells to more than 200,00 during the winter months, when snowbirds and glamour-seeking Northerners travel south to enjoy the good life.
The island city, which consists of 7.1 sq. miles between Biscayne Bay and the Atlantic Ocean, is home to a multicultural and multilingual community with a growing Hispanic presence, which, as of 1997, accounted for more than 57% of the city's population.
The median age of the city's residents has dropped to 44.5 from over 65 years in 1980. The number of South Beach residents who are 14 years old or younger continues to increase - from 6.5% in 1980 to 20% in 1997 - indicating that the number of families on the beach continues to grow as well.
Often tauted as the American equivalent of the French Riviera, South Beach's shopping environment is eclectic and exciting. Ocean Drive, Collins Ave., Alton Road, Arthur Godfrey Rd. and Washington Ave., are all major shopping thoroughfares, offering merchandise categories ranging from posh designer clothing to Art Deco collectibles.
Once rundown, now revived, south Collins Ave. is emerging as the newest hot retail district. Retailers including Armani Exchange, Urban Outfitters, Gap and Nine West have already joined the lineup.
Lincoln Road, once known as one of the hottest U.S. shopping streets, is experiencing a renaissance thanks to an influx of entertainment and retail tenants, including Regal's 18-screen South Beach Cinema and Banana Republic, Williams-Sonoma and Pottery Barn.
The retail sector of North Beach is also growing thanks to new incentive programs including commercial facade restoration grants and enterprise zone tax incentives.
Source: Garrick-Aug Worldwide, New York.