Tampa may be known for its retirees, sandy beaches and Cuban flair, but it could also add job growth, ever-increasing population and retail opportunities to that list.
Sure, the city saw retailers cut 10,000 jobs after September 11, but the area managed to end that year with a net gain of 6,000 retail-related jobs. In fact, according to a report by Trammell Crow, Tampa Bay experienced job growth of 3.8 percent, leading the nation in job growth in the year ended October 2001.
It helps that the state of Florida grows by 900 people every day, a large percentage of whom heads for central Florida. John Crossman, senior vice president and director of retail services for Trammell Crow, says that increase roughly translates into the need for a new grocery store every nine days.
According to the latest census, the city of Tampa has a population of more than 303,000, but the population of Tampa's metropolitan statistical area, which is comprised of Hillsborough, Pinellas, Pasco and Hernando counties — including St. Petersburg and Clearwater — was nearing 2.4 million in 2000, up from 2 million in 1990.
While a large number of its new residents are retired (in 2002, almost 7,300 persons ages 65 and older moved into town), Tampa is also seeing growth in singles and families. Actually, about 64 percent of its population is 44 years old or younger. And the new retail reflects that diversity, from higher-end shops to an influx of discounters and, of course, grocery stores.
Michael Leeds, chief operating officer of RMC Property Group, says even though Florida has had its share of problems with falling tourism after September 11, retail has remained strong. A Trammell Crow report says average retail rents have risen to $15.34 per square foot in 2003 from $14.86 in 2002. Crossman says occupancy rates have stayed around 90 percent, even with all of the newly added space. While that is not the best of situations, he says it isn't “negatively impacting other parts of the submarket.”
Just two years ago, days after the terrorist attacks, Tampa saw the opening of International Plaza, a 1.2 million-square-foot mall. It's part of a mixed-use project that will have 1.1 million square feet of office space completed in its first phase by the end of the year and a 300-room Marriott Renaissance hotel expected to open in 2005.
Bloomfield Hills, Mich.-based Taubman Centers developed the mall. Bruce Heckman, Taubman's vice president of development, says the mall, anchored by Lord & Taylor, Dillard's, Neiman Marcus and Nordstrom, wasn't intended to be strictly high-end, even with the presence of such elite retailers as Louis Vuitton, Tiffany & Co. and Christian Dior. Heckman says his company wanted to bring new retailers to Florida's Gulf Coast. It succeeded with Nordstrom and Tiffany and about 30 percent to 40 percent of International Plaza's occupants, including Bose.
Heckman says that the mall not only stayed open in the aftermath of the attacks, but also during a tropical storm. While that would seem to not bode well for the success of the mall, he says occupancy is generally more than 90 percent and sales have been good.
“It's certainly meeting our expectations,” he says.
What helps, he says, is that the mall is adjacent to the Tampa International Airport, which runs shuttles to the mall for passengers with layovers.
But International Plaza isn't the only new mall in the area. There are also retail-entertainment complexes Channelside in Tampa and Centro Ybor in Ybor City.
Channelside looks like a successful lifestyle mall, with Mediterranean-influenced storefronts, a variety of bars and a nine-screen theater with an IMAX all overlooking the seaport; however, it's been anything but. The 225,000-square-foot mall that cost $49 million to build has suffered from low local traffic, an out-of-the-way location and a quirky group of small retailers.
The mall was built along the Garrison Channel, which serves as a port to cruise ships that pass through the bay, but when the ships aren't around, Channelside is quiet.
The major anchor is the theater; there are no large national retailers. Tenants include a wine shop, a cigar store and White House Gear, which sells presidential and White House souvenirs including apparel.
However, Steve Ekovich, regional manager of the Tampa and Orlando offices for Marcus & Millichap, says that he thinks Channelside, developed by Orix Real Estate Equities of Chicago, has great potential, thanks in part to a new light-rail connection to downtown and Ybor City.
“I think of it as a good five-years-from-now location,” Ekovich says, adding that the mall is in one of the last undeveloped parts of Tampa. Lately, there has been interest from restaurants. Four occupants have committed to about 40,000 square feet. Hooters is leasing nearly 7,500 square feet; upscale steakhouse Grille 29 is taking 8,900 square feet and an as-yet-unnamed tapas and martini bar will occupy 6,000 square feet. The biggest new tenant is 27,000-square-foot Kingpins, a bowling alley and billiards hall for the yuppie set.
Trammell Crow's Crossman says Channelside has “good bones,” but adds that caution is recommended in Tampa's competitive environment. In such an environment, one has to be focused on the consumer, including the all-important local shopper. He says a mall in Tampa can't just be a destination, but must focus on the local trade area in the two-to-five mile radius.
There are exceptions, though, and Cuban-influenced Centro Ybor, developed by the Sembler Co., is one of them. The $45 million, 220,000-square-foot development lies in historic Ybor City, which already attracted nightlife with its many dance clubs. At one time, it was the “cigar capital of the world” — then home to 200 cigar-making factories. Centro Ybor holds its own thanks to its trendy bars, restaurants and entertainment venues. It also attracts a varied daytime crowd with such retailers as Urban Outfitters, Birkenstock and tourist attractions, including the Cigar Museum and Visitor Center.
Older regional malls are bowing to the newer competition.
The 895,000-square-foot Tampa Bay Center is closed as Beverly Hills, Calif.-based owner First Allied Corp. considers development options. First Allied paid $22.9 million to Columbia, Md.-based The Rouse Co. for the property, which it coveted for its location across the street from Raymond James Stadium, where the Tampa Bay Buccaneers play. The Glazer family owns the Bucs. There's talk of putting in a training center there and/or themed shopping.
Grosvenor Group has put International Plaza's nearest competitor, the 1.1 million-square-foot WestShore Plaza, on the auction block for $150 million. A Trammell Crow report says multiple renovations have kept it competitive.
The Clearwater Mall, meanwhile, was demolished completely, and its 73-acre site is being redeveloped into a power center that will be anchored by a Lowe's Home Improvement Center, a Costco and a Target Super Store.
But Tampa is not getting all its retail action from regional malls. Grocery-anchored shopping centers keep popping up in the hot Florida sun and whatever burns up, gets replaced quickly.
Grocery store giants Publix, Albertsons, Winn-Dixie and Kash n' Karry are the most popular anchors in the Tampa area. (See Regency's Reign about Florida-based grocery chain on page 18.)
RMC's Leeds says more new neighborhood centers are on the horizon as the influx of new residents ceases to let up. And with the equity market still scaring some investors away, more have looked at the viability of grocery-anchored shopping centers.
Institutional investors, pension funds, life insurance companies and the like are looking at these shopping centers as a safe investment, because no matter what's going on in the economy, people have to buy groceries and medicine and they have to get their hair cut and clothes dry-cleaned.
Susie Levin Rice, president of RMC, which merged with FOG Development last year, operates about 20 shopping centers in the Tampa Bay area.
Rice says the market has remained strong and that national tenants as well as mom-and-pop establishments are looking to move into or even expand in the area. (See Like Father, Like Daughter on page 12 for more on Rice.)
“The market can always handle a new or different type of retailer,” Rice says, “Tampa has a lot of diversity of restaurants and retail. I think it offers a lot of opportunity.”
Total Metro Population 2003: 2.5 million (+1.5% YOY)
Metro Unemployment Rate 2003: 4.6%
Metro Median Household Income: $37,406
Metro Median Home Price Q12003: $139,000
Metro Median Home Price Growth Over 2002: 6.5%
Per Capita Income 2001: $29,379 (+2.2% YOY)
Source: Economy.com; Bureau of Economic and Business research, University of Florida
Average Rent 2003: $15.34 (+.48% YOY)
Retail Vacancy Rate 2003: 7.36%
Retail Vacancy Rate 2002: 8.01%
Cap Rates For Single-Tenant Properties 2003: 8.5%
Cap Rates For Single-Tenant Properties 2002: 9%
Source: Trammell Crow Co.; Marcus & Millichap