As retail across the United States braces itself for stormy weather, development in Florida sails smoothly along.

Florida could be described as the ultimate tourist trap. Since Henry Morrison Flagler discovered and started serious development in the state in the early 1900s, Florida's warm climate and beautiful scenery have attracted scores of visitors. In 1999 alone, 58.9 Million visitors poured millions into the state's economy, ensuring full-time Floridians' exemption from personal income tax. The absence of personal income tax in the state continues to drive population growth, and several Florida markets continue to lead the nation in average household income growth and total employment growth.

As baby boomers near retirement, Florida could be on the cusp of even further population growth. According to a report from the Federal Interagency Forum on Age-Related Statistics, the U.S. population age 65 and older will double by 2030. This could be good news for the state, as demographic trends show current and future retirees consider factors such as recreational opportunities, climate, scenic amenities and state-of-the-art medical facilities when choosing a relocation spot.

As state government continues to encourage a diversified economy by attracting more high-tech companies to Orlando and the Gold Coast counties, a younger, Gen-X demographic is also invading Florida. Additionally, the expansion of the Latin American economy has spurred a boom in South Florida, where financial and trade companies serving the Latin market are mushrooming.

Of course, the steady influx of new residents and industry is good news for retail developers. With more than 440 million sq. ft. of GLA, Florida's retail inventory is already the second largest in the United States. Recently opened centers such as The Palladium Co.'s trend-setting CityPlace in Palm Beach and Taubman Centers' Dolphin Mall in Miami — in addition to the four regional malls projected to open throughout Florida in the next two years — will bring that figure even higher.

North Florida

Though not as hot as their neighbors to the south, the middle markets of Northern Florida are seeing some development action. Lifestyle and mixed-use projects are particularly popular. “We're pretty solid in all our trade areas,” says Gary Montour, senior vice president of Colliers Dickinson in Jacksonville. “The Beaches continues to be strong, and the Baymeadows/Southside, Regency and Mandarin areas all have well over 90% occupancy.”

Jacksonville, home to nearly 20 million sq. ft. of retail GLA, is the site of two major new developments: Deerwood Town Center, Indianapolis-based Simon Property Group and Atlanta-based Ben Carter Properties' $200-million, 1.2 million-sq.-ft. open-air center set to open in August 2003, and Freedom Commerce Center, West Palm Beach-based The Goodman Co.'s 855-acre mixed-use development. Both projects are open-air, mixed-use and upscale — a combination that will be new to many Jacksonville consumers.

“People are getting worn out on the whole enclosed regional mall concept. Developers are beginning to realize that shoppers are looking for something a little more exciting, where they actually can feel like they're part of a big, urban environment,” says John Dowd, senior vice president for The Goodman Co.

In Northeast Florida as well as throughout the rest of the state, grocery chains continue to vie aggressively for the lion's share of the market pie. With Winn Dixie and Publix stores abandoning their former sites in favor of bigger, more splashy digs, the previous locations are being hastily grabbed up for redevelopment. “In Jacksonville Beach, where the old Publix was located, they put in a new Home Depot, and now it's doing fine,” notes Montour.

Nor is Office Depot the only retailer seeking inroads. “We're seeing the big boxes such as BJ's Wholesale Club, Costco and Sam's building superstores in order to enter the grocery business. Statewide, the big chains including Lowe's, Home Depot, Staples and Office Max also are starting to put a bite on the smaller businesses. That, in turn, is causing the smaller businesses to challenge the way they've always thought in the past,” Montour says.

For the immediate future at least, Montour does not foresee overbuilding becoming a problem. “At least in Northeast Florida, we won't be seeing the kind of overbuilding we did in the 1980s, when the banks actually were going after the retail centers. This is a much more controlled growth,” he says.

Orlando

With more than 1.5 million residents, Orlando's population is growing at the rate of 2.27% per year, according to Integra Realty Resources Inc.'s Viewpoint 2001 report. To capture the buying power of these consumers, retail development has reached an inventory of 41 million sq. ft., with another 8 million sq. ft. of GLA online for completion in 2003. Orlando will remain a national leader in retail sales growth and in leasing and sales through 2005, according to NAI Commercial Real Estate Services.

“People want to take advantage of the tourism between Orlando and Disney World, so that's where a lot of retail action en masse is located,” says Diane McCarey, vice president of Orlando-based Commercial Net Lease Realty. Most notably, she says, the city's southwest sector is a hotbed of retail activity.

Orlando is also feeling the effects of the big boxes “that want to get their clutches on their share of the market penetration, and look to come in when they see a competitor pulling back,” McCarey says. Publix especially is on an aggressive expansion throughout, she adds.

Development-wise, the foremost concentrated area of square footage is near the Universal Studios theme park. That's where Southfield, Mich.-based The Forbes Co. in conjunction with Bloomfield Hills, Mich.-based Taubman Centers, is constructing the Mall at Millenia. Slated to open in August 2002, the project “will be the upscale, fashion-oriented destination in the marketplace,” says Mark Bulmash, vice president, development, Taubman Centers.

St. Petersburg & Tampa

In other parts of the state, developers are going full steam ahead with building plans. Several are focusing their efforts on providing “niche-oriented” projects in areas they say previously were underretailed. “We're looking to build centers in places that aren't on anyone's radar yet,” says Ted Templeton, a partner with Miami-based Retail Estate.

“Specifically, we're taking a hard look at downtown St. Petersburg, which is one area where people always assumed the demographics were older or retired. Consequently, there hasn't been a new movie theatre or retail center to go in there in 15 years. Yet AnnTaylor and Chico's recently have gone in — and they're both doing great.” Locally based The Sembler Co. is also taking interest in downtown St. Pete, where it is developing Baywalk, a 163,000 sq. ft. project anchored by a 20-screen Muvico.

If in fact the St. Petersburg market has been somewhat neglected in past years, the same can hardly be said for its bustling sister city. The Tampa market, with its current retail inventory of some 58 million sq. ft., will see the opening of Taubman Centers' International Plaza and Bay Street at the Plaza next month. The mixed-use project will bring Neiman Marcus, Lord & Taylor and Nordstrom to the west coast of Florida for the first time.

With more than 1 million sq. ft. of GLA under construction for completion by 2003, Tampa is way ahead of the national average for GLA per capita. According to Integra Realty Resources, the city currently has 22.89 sq. ft. of GLA per capita, compared to the national average of 16.16. Tampa's retail vacancy rate, just above the national average, is 7.5%.

Southwest Florida

From the standpoint that its entire market encompasses barely a million people, Southwest Florida, which includes Sarasota, Fort Myers and Naples, differs dramatically from other markets in the state. Regardless, a good amount of development is underway in the area. “Sarasota is a very interesting market, because probably 80% of its population is located between Interstate 75 and the Gulf of Mexico, and that's only five to 10 miles. As a result, you don't have a big distance to work with,” says John Mounce, a principal with Colliers Arnold in Ft. Myers.

As is the case throughout much of Florida, chains such as Sam's and BJ's wholesale clubs are scrambling to make their name in the marketplace. “That general area is seeing a lot of growth, especially of the grocery-anchored centers… Like almost everywhere else in Florida, Publix is definitely dominating the market. We're seeing a lot of the Food Lions, Cash and Carries and Winn Dixies closing — although they are now beginning to appear on the site plans, again. Albertson's is starting to have a small presence — but again, it is nothing like Publix,” Mounce says.

In Ft. Myers, the Miami-based Leftmark Group introduced CostCo as well as relocated TJ Maxx to the area. In addition, a number of older centers are undergoing renovation. However, when it comes to growth, it is the nearby Bonita that “probably has the fastest-growing population in Southwest Florida… Right now, they've got probably 20,000 homes under construction there. It's just exploding,” Mounce says.

Meanwhile in Naples, developers continue their battle to affix their name to land so as to take advantage of Collier County's abundance of wealth. Along with “a lot of the $30-40 rent, high-end, boutiquey stuff,” Miami-based Courtelis Co. recently completed a power center, with Marshall's, Linens and Things, and Haverty's Furniture Store as anchors, according to Mounce. In addition, Home Depot just opened its second location in the city.

Miami-Dade, Broward and Palm Beach Counties

Though it has the largest population of the South Florida markets, Miami-Dade possesses the smallest amount of GLA in the tri-county area. However, the 16 million-sq.-ft. market outperformed both Palm Beach and Broward Counties with the lowest vacancy rate (7.01%) and highest average rental rate ($19.06 per sq. ft.) in South Florida, according to Trammell Crow Co.'s MarketScope 2000.

Miami-Dade's Kendall submarket boasts a particularly low vacancy rate, which has spurred development of several new projects, including Columbia, Md.-based The Rouse Co.'s 1.3 million sq. ft. Kendall Town Center and locally based Prime Sites Inc.'s 300,000-sq.-ft. Galaxy at Dadeland. Most of the region's new projects are mixed-use or entertainment centers.

Coral Gables and West Dade are two other hot spots in the overall Miami-Dade market, which registered an average retail property sale price of $71.49 per sq. ft. last year, according to Trammell Crow.

Ranked by Forbes magazine as one of the United States' top 10 places for business and career advancement, Palm Beach County features a retail inventory of more than 21 million sq. ft. With average rental rates at $14.51 per sq. ft., the area is poised to become one of the most retail-saturated markets in the United States. Public/private alliances have revitalized downtown West Palm Beach, and retail transactions for the county averaged $150 per sq. ft. for 2000, according to Trammell Crow.

Already home to four regional malls and upwards of 60 other shopping centers, Palm Beach will be gaining an additional 1.3 million sq. ft. of retail when the ubiquitous Taubman Centers' The Mall at Wellington Green opens in October. The center will serve as the retail component of a 470-acre, masterplanned community.

Nearby Broward County has not been keeping pace with its booming neighbors. Due to overbuilding in the early 1990s, the market has an excess supply of space and the highest vacancy rate (10.31%) in the tri-county area. According to Trammell Crow, Broward currently has approximately 1 million sq. ft. of total space under construction and planned, compared to 5.5 and 4 million sq. ft. in Miami-Dade and Palm Beach, respectively. Southwest Broward, where population growth is centered, is the region's most active submarket. For 2000, average rent in Broward was $13.74 per sq. ft. and average sales price for retail properties was $77.58 per sq. ft.

In keeping with the success of public/private alliances in downtown West Palm Beach and Panama City, Fort Lauderdale's own Downtown development Authority is seeking to transform the city's business district into a 24-hour marketplace. Whether the attempt will meet success or not remains to be seen.

Patti Connor is a Jacksonville, Fla.-based writer.

Florida project listings

Project Name | City, State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchors
Aventura Crossings
Aventura, Fla.
Turnberry Assoc. & Gadinsky
Real Estate | Aventura, Fla.
P | N 200,000 sq. ft. Spring 2003 (Proposed) Nordstrom Rack
Destin Commons (Phase I)
Destin, Fla.
Turnberry Assoc. & Legendary Inc.
Aventura, Fla. & Miami
P | N 700,000 sq. ft.
(400,000 sq. ft.)
2002 To be announced
Daytona Shopping Center
Daytona, Fla.
Daytona Mall LLC
Daytona, Fla.
C | RD 200,000 sq. ft.
(+ 260,000 sq. ft.)
Open Save-A-Lot, Family Dollar, Aaron's Rental
Mary Brickell Village
Miami
Constructa
Miami Beach, Fla.
L | N 165,000 sq. ft. 2002 To be announced
Freedom Commerce Center
Jacksonville, Fla.
The Goodman Co.
West Palm Beach, Fla.
P & L | N (P) 500,000 sq. ft.
(L) 700,000 sq. ft.
2002 To be announced
Tradewinds Shopping Center
Pensacola, Fla.
CNM Associates
Atlanta
P | RN 178,554 sq. ft. August 2001 TJ Maxx, Phar-Mor, Shoe Station
International Plaza
Tampa
The Taubman Co.
Detroit, Mich.
M | N 1.26 million sq. ft. September 2001 Dillards, Neiman Marcus, Nordstrom, Lord & Taylor
Mizner Park
Boca Raton, Fla.
Crocker Downtown Dev. Assoc.
Boca Raton, Fla.
L | RD 156,000 sq. ft. Open Jacobson's, Boca Raton Museum of Art
Boulevard Square
Pembroke Pines, Fla.
Stiles Retail Group
Ft. Lauderdale, Fla.
C | N 211,000 sq. ft. Open Ross, TJ Maxx, Sports Authority, Office Max
Santa Rosa Mall
Ft. Walton Beach, Fla.
Jim Wilson & Associates
Montgomery, Ala.
M | RN 752,000 sq. ft. Open Old Navy, Dillard's, JCPenney, McRae's,
Baywalk
St. Petersburg, Fla.
The Sembler Co. Redev. Partners
St. Petersburg, Fla.
E | N 158,000 sq. ft. Open Muvico, AnnTaylor, Chico's
Winter Haven Citi Centre
Winter Haven, Fla.
Trammell Crow Co.
Orlando Fla.
P | RD 321,271 sq. ft. August 2001 Belk, Burdines, Lowe's, Staples
Crossroads at Lake Buena Vista
Orlando, Fla.
Trammell Crow Co.
Orlando Fla.
C | RN 147,214 sq. ft. Open Goodings, TGIFridays
Grand Oaks Village
Orlando, Fla.
The Curtis Group
Orlando, Fla.
F/S | N 60,000 sq. ft. Fall 2001 Fresh Market, CVS, Stonewood Grill
Plaza Venezia
Orlando, Fla.
Intram Investments
Orlando, Fla.
F/S | N 150,000 sq. ft. Fall 2001 Publix, Panera Bread Roys
Regency Village
Orlando, Fla.
Regency Centers
Jacksonville, Fla.
N | N 76,270 sq. ft. May 2002 Publix
Shops at Pebblebrook
Naples, Fla.
Regency Centers
Jacksonville, Fla.
N | N 76,766 sq. ft. November 2001 Publix
Marketplace at Hobe Sound
Hobe Sound, Fla.
Southern Mgt. & Development
Boca Raton, Fla.
N | RN 153,070 sq. ft. Open Beall's Outlet, Dollar General
Southwood Shoppes
Bradenton, Fla.
Southern Mgt. & Development
Boca Raton, Fla.
N | RN 113,949 sq. ft. Open Kash ‘n’ Karry, Beall's, Dollar General
The Prado at Spring Creek
Bonita Springs, Fla.
Courtelis Co.
Miami
C | E 170,000 sq. ft.
(+ 50,000 sq. ft.)
November 2001 Regal Cinemas, SteinMart, Walgreens
Granada Shoppes
Naples, Fla.
Courtelis Co.
Miami
P | N 270,000 sq. ft. Open EXPO Design Center, Pier One, Linens ‘N’ Things
Lakewood Shopping Center
Margate, Fla.
Courtelis Co.
Miami
C | RD/RN 350,000 sq. ft. November 2002 Kmart, Marshalls, Walgreens
Old Hyde Park Village
Tampa, Fla.
Madison Marquette
Cincinnati
L | E 225,000 sq. ft.
(+ 25,000 sq. ft.)
Open Pottery Barn, Pottery Barn Kids, April Cornell
The Bell Tower Shops
Fort Myers, Fla.
Madison Marquette
Cincinnati
L | E 340,000 sq. ft.
(+ 30,580 sq. ft.)
Open Saks Fifth Avenue, Bed & Beyond, Jacobson's
Center Type: S=Strip Center, N=Neighborhood Center, C=Community Center, M=Regional/Superregional Mall, P=Power Center, O=Outlet Center, L=Lifestyle Center, F=Fashion/Specialty Center, MU=Mixed-Use Development. Project Type: N=New Project, E=Expansion, RN=Renovation (updating look, refacing, common area or amenities upgrade), RD=Redevelopment (demalling or remerchandising). Completion Date*: Subject to change. Existing/Planned GLA (Expansion GLA): GLA=Gross Leasable Area. TBA=To be announced/unavailable.

An eclectic formula for success

When a project takes nearly five years to finish, odds are it won't disappoint. And Dolphin Mall — a value retail center, amusement park and entertainment plaza all rolled into one — is no exception. Located five miles west of Miami International Airport at the intersection of Dolphin Expressway and the Florida Turnpike, the 1.4 million-sq.-ft. mall (designed by Boulder, Colo. - based CommArts) is as colorful and eclectic as Miami itself.

With dozens of new-to-the-market stores, the center is also on its way to becoming one of South Florida's top tourist attractions. “It's doing really well,” says John Simon, managing director of development for The Taubman Co. of Bloomfield Hills, Mich. “We opened March 1 with about 150 stores, and we now have more than 200 stores. Many of the majors are doing even better than anticipated.”

Those anchors include Dave & Buster's, Off 5th Saks Fifth Avenue, and Oshman's SuperSports USA. Other large format retailers include Burlington Coat Factory, MARS Music, Old Navy and a 19-screen Cobb Theaters megaplex.

Beame Architectural Partnership of Coral Gables, Fla., designed the center. “With all the tourism we have in Miami, not to mention all the people coming in from Central and South America, we wanted the entertainment to be right there, on display immediately,” explains Olga Pizzi Garcia, a principal at the firm who headed the design team. “The challenge was for us to incorporate the entertainment the way we wanted and at the same time to get the value center right as well.”

In a nod to Miami's rich cultural traditions, the center's offerings — including the outdoor plaza and 850-seat food court — are presented along an oval path divided into paseos (“walkways”) and shopping zonas (“zones”). The three zones — ramblas (“walk”); playa (“beach”); and moda (“style”) — are designed and merchandised to add convenience and excitement.

Built on two levels, the mall is tied together by a barrel vault and features an oval, race track-style design, with shopping areas on either side. Garcia wanted the vault to be an icon of sorts that motorists could see from the expressway.

Of all the challenges the designers faced, making sure shoppers wouldn't be overwhelmed by the center's sheer size was the most daunting. “We wanted to break up the units and spaces so people would feel comfortable and also be able to grasp what they were walking through,” Garcia explains. “We decided the best way to do that was to have a sequence of different spaces, rather than an endless procession.”
— Patti Connor