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CREC Selected To Exclusively Lease Newly-Redeveloped 120 Giralda Avenue In Downtown Coral Gables

CREC – Florida’s leading, independent, full-service commercial real estate firm – announced today that it has been appointed the exclusive leasing agent for the prominent retail and dining destination of 120 Giralda Avenue. Located in the epicenter of downtown Coral Gables, the property is ideally situated on the newly-renovated streetscape of Giralda Plaza.

Formerly occupied by the Church of Scientology, 120 Giralda Avenue will undergo a complete renovation that includes multi-story spaces and a new rooftop component, totaling 14,534 square feet. Unique to the Coral Gables sub-market, the elevated terrace can be transformed into a lounge area or similar concept. Its ground floor offers 3,000-11,000 square feet of retail space, with the hip, fast-casual eatery of Coyo Taco to be its newest tenant.

“We are excited to lead the leasing efforts for this important Coral Gables property that is contributing to area’s revival as a bustling retail destination,” said CREC President and Co-Founder Carol Greenberg Brooks. “With this addition to our diverse lifestyle retail portfolio, we continue our notable track record of positioning highly-sought retail locales in Florida with our creative approach to curating one-of-a-kind tenant line-ups.”

Giralda Plaza recently underwent a complete revitalization as part of Coral Gables’ multi-million-dollar streetscape project and was converted into a pedestrian-only promenade. The thoroughfare, between Ponce de Leon Boulevard and Galiano Street, is now the area’s “Restaurant Row” and home to established eateries as Talavera Cocinera Mexicana, Local Craft Food & Drink and Threefold Cafe.

“The major redevelopment of Coral Gables’ ‘hottest’ street and the allure of ‘restaurant row’ will quickly draw attention to this building from a wide range of tenants that appreciate the walkable experience that drives high foot traffic,” added Steven Henenfeld, senior vice president and director of leasing.

Henenfeld, along with CREC Vice President of Retail Rafael Romero, will oversee leasing of 120 Giralda Avenue.

About CREC

CREC is the leading, independent, full-service commercial real estate company in Florida with offices in Miami, Orlando and Jacksonville. Since its founding in 1989, CREC has provided fully-integrated real estate services, including brokerage, leasing, management, tenant representation, receiverships, workouts, as well as debt and equity financing. The company continues to uphold its mission of being “Your Florida Partner” through its commitment to providing clients with unrivaled service and a streamlined approach. Through the years, CREC has built a portfolio of more than 13 million square feet across 100-plus properties throughout Florida. For more information, visit www.crec.com.

Bridging the Gender Divide in Commercial Real Estate
Women in the field find the deck is largely stacked against them, even as some top firms have been celebrated for their inclusionary policies.

Barbara Liberatore Black’s rise to managing director of JLL’s South Florida office was not an easy one. Currently the only female executive in her office, Black was also one of the first women in commercial real estate in Miami.

She got her start doing tenant representation for Julien J. Studley Inc., the precursor to Savills Studley, in 1981. “I was the only female tenant adviser for years,” Black said. Before securing that gig, she’d tried to get her foot in the door elsewhere, to no avail. 

“If you were a man today, I would hire you,” an interviewer told her, reasoning that as a woman who was going to get married, she wouldn’t have the time for the job. Instead, he offered Black a secretarial position. She turned it down.

Times have clearly changed, but in the wake of the allegations of sexual harassment and assault by Harvey Weinstein — and the many similar charges against high-profile men that followed, including starchitect Richard Meier — several, if not all, industries are facing profound questions about company culture and fairness.

However, many women in South Florida’s commercial real estate industry are not seeing a major push to close the gender gap. They say the #MeToo movement hasn’t kicked off the kinds of productive conversations it was intended to inspire. Rather, many male colleagues are “now afraid to say hello” to women, Carol Brooks, co-founder of the brokerage Continental Real Estate Companies (CREC), said. “It’s coming more from a place of their own self-preservation. It’s interesting to see how men are reacting; it’s more fear than compassion or anything,” she said.

The Real Deal examined the male and female representation of agents working for South Florida’s top five commercial brokerages (determined by the dollar volume of sales and leases as reported by the South Florida Business Journal) by analyzing broker license data filed with the state as of Feb. 23. Marcus & Millichap had the lowest percentage of female agents in the tri-county region of Miami-Dade, Broward and Palm Beach counties, with 18 percent.

Lori Schneider, senior managing director of investments at Marcus & Millichap, said she thinks the firm has fewer women than the others because the company focuses only on investment sales, which takes time and money “until you establish yourself.” Women typically have less of both than men, she said. Leasing, on the other hand, often provides agents with a crucial base salary.

CBRE had the highest percentage of women agents, with 39.8 percent, and JLL closely followed with the second highest representation of women, 38.6 percent, according to TRD’s analysis.

Both CBRE and JLL recently won industry awards for their gender inclusion. CBRE, where three of the firm’s board members are women, received the Diversity & Inclusion Award from the Mortgage Bankers Association in February. In March, JLL was named one of the National Association for Female Executives’ “Top Companies for Executive Women.”

CBRE and JLL’s numbers of female brokers in South Florida are better than national averages. The Commercial Real Estate Women (CREW) Network Benchmark study conducted in 2015 — the most recent data set of its kind that’s available — showed that only 23 percent of leasing and sales brokers in the U.S. were women in 2015. But that number was up from 20 percent five years earlier. Between 2010 and 2015, women went from representing 32 percent of the total commercial real estate workforce to 36 percent nationwide. The subsector with the highest concentration of women was property management, with 51 percent of the asset, property and facilities management workforce female, up from 47 percent in 2010.

And while the CREW research found that women made 23.3 percent less than men in the field in 2015, all of the women contacted for this story had a different experience. Female brokers said that because most positions are commission-based, the wage gap isn’t much of an issue. “The good news about that is a woman who is driven can be equal or better [than a man], and she will get paid,” Black said. “I think this is one of the few careers where women get equal pay.”

The achievement gap

Although there’s been progress in overall male-to-female ratios, the gender gap is still quite vast when it comes to women in leadership positions. CREW’s 2015 study found that only 9 percent of the women who were surveyed held executive roles, compared to 17 percent of the men who participated in the study.

The industry is also facing an aspirational gap between men and women. Forty percent of men surveyed by CREW said they wanted C-suite positions compared to only 28 percent of women. And once men had between six and 10 years of experience, they rose through the ranks at a faster pace than women, the report found.

“Men are much more vocal than women. When you don’t speak up and you don’t ask for the job, you don’t get it,” said Sara Hernandez, president of CREW-Miami.

Women developers are also lacking in the industry because the field requires a track record and capital, said Avra Jain, a commercial developer in Miami’s MiMo, Little Haiti, Miami River and Overtown neighborhoods.

“When I first came down to Miami [17 years ago] and I walked into a meeting to buy a piece of property, the broker kept talking to the man next to me,” Jain said.

The perils of after-hour events

“‘Welcome to the company. I Googled you hoping to find some bikini shots online,’” Pauldine France, vice president of strategic investments at FIP Commercial, recalled a man saying on her first day at a new job. “I once had a COO I ran into at a party who was trying to get me drunk to take me home. His wife was at the same party,” she added.

Most women in the industry who were contacted for this story agreed that there’s been some progress in hiring more women, but the presence of some bad actors remains a big issue.

France got her start in 2003 as a brand ambassador for Tony Cho when he launched Metro 1 Properties. She was later a financial adviser at Morgan Stanley, then worked for Shawmut Design and Construction in New York, Thor Equities in Miami and, more recently, spent a year working for RKF, also in Miami.

France is, as she describes herself, a “six-foot-tall black chick with green eyes.” She’s faced more than her share of unwanted attention, she told TRD. “I’m used to people looking at me. In commercial real estate, I am a unicorn of a unicorn,” she said. “I’ve had inappropriate, ‘let me take you home’ comments.”

The necessity of after-hours networking doesn’t help things. Going to nightclubs, strip clubs and bars is still a way to get deals done in Miami, sources said. There’s also still a lot of golfing.

“Half of these guys just want to party, and the business facilitates partying” said Mika Mattingly,
executive vice president of Colliers International South Florida.

Some women push themselves to head to the golf course or boozy networking events even when it’s uncomfortable. CBRE’s Carol Ellis-Cutler, first vice president of advisory and tenant services in Miami, attended a conference earlier this year where she was one of a handful of women out of a crowd of 800. She later attended the golfing event, where she was the only woman — alongside 32 men.

However, Ellis-Cutler and Arden Karson, senior managing director of CBRE South Florida, both said they also use their gender to their advantage. “Being the only woman at the table, they love that,” Karson said, referencing her male colleagues. She squeezed her way into a dinner during a CRE Finance Council event because she wanted to do business with the group.

“I was the only woman out of 20 people, and they all wanted to sit with me,” Karson said, noting that the extra attention she received was not inappropriate. The men, she said, just wanted to speak to a woman because it was “a refreshing change.”

Men can be more inclined to share information with women, some female brokers said. But that too can have its downside. There’s a fine line between being “approachable and nice” and being “firm,” France said. “You have to deliver this coolness while still keeping that meter stick in front of them,” she said. “Nine out of 10 times, ‘super cool’ can become ‘I can make comments about your new push-up bra.’”

Mentoring the next generation

When considering ways to resolve some of these murky issues, many women said that mentoring a new generation of female brokers is the most important work that needs to be done. And South Florida’s a good place for that: A number of women in leadership roles in commercial real estate own their own companies or work for women who do.

Brooks, of CREC, got her start working in the corporate real estate lending department at Southeast Bank and moved on to the Continental Companies, where she was director of the commercial office leasing department. In the late ‘80s, she considered working at other brokerages and said, “Screw that, I’ll start my own company.”
At that company, a boutique commercial firm she co-founded with Warren Weiser, 51 percent of its 120 employees are female. Two of its six partners are women, and half of its department heads are women. More than 60 percent of CREC’s property managers are women, and 26 percent of the company’s brokers are women. “There are just such high barriers to entry otherwise, so we’ve created our own system,” Brooks said.
Her approach to nurturing female talent development has paid off in the eyes of Sabrina Stimming. Brooks mentored Stimming, who started as an executive assistant and was promoted to marketing assistant, then marketing director. An opening appeared in retail leasing, and now Stimming is director of retail leasing and a partner at CREC. She believes that had she started her career at a traditional brokerage like a CBRE, “it’s probably not likely I would be a head of a department there.”
“If you look around at other firms in our industry, the only women you see in any sort of leadership positions are women who form their own companies,” Stimming added.

Without a mentor, Collier’s Mattingly developed her own strategy for success that many women in the industry adopt: Be the best at the job. She’d pick a neighborhood or area and become an expert on it. “I picked Sunset Island II, which I liked at the time, and I farmed the fuck out of it,” she said. 

From Metro 1, where Mattingly started in 2006 as a commercial associate, she went to Sterling Equity Commercial, where she’d “transact all day off-market, but no one would trust me with big listings.” She eventually represented Moishe Mana in nearly all of his acquisitions in downtown Miami’s Flagler District, which to date has totaled $267 million on 1 million square feet of building space and eight acres of land.

In 2016, Mattingly joined Colliers and is building her team out of an office in downtown Miami. Although it’s not her own company, it’s clear that she’s running her own operation out of the ground-floor retail space on Flagler Street. She said she’s teaching her team to become neighborhood experts, as she did, by learning every property and zoning before they start selling.

Tere Blanca, founder, chairman and CEO of Blanca Commercial Real Estate, also wants to nurture female talent. She left Cushman & Wakefield to start her own firm in 2008 and is responsible for mentoring everyone in the 22-person office, including a few female agents. In her view, the lack of women in the field may stem from them just not knowing about it. “I don’t think a lot of young women understand the opportunities that exist in the industry,” she said.

Ellis-Cutler and some of her colleagues at CREW-Miami introduced themselves to a group of high school girls by telling them, “We don’t sell single-family homes. We can sell the entire multifamily building.”

CBRE created its Women’s Network in 2000; it now has 3,500 members nationwide and hosts quarterly events. The gender gap at CBRE and other major commercial brokerage persists, but Karson acknowledged that the firm’s numbers are going up.

Forging ahead

While women in commercial real estate today see some struggles and disparities, JLL’s Black said the industry has grown to include more women since she got her start in the early ‘80s. “The one thing I’ve noticed is that women feel more empowered to say to their peers or their managers, ‘Hey, that was an off-color joke’ or ‘I didn’t really like the way you said that about me.’ Women are using their voice now to explain that it’s not right,” she said.

However, Black sees two areas where female representation is lacking: tenant advisory and capital markets, both of which are especially profitable sectors of the business. “That’s predominantly still occupied by men, but in time that will change,” she said.

Jain is also optimistic about closing the gender gap in development.

“We’re starting to see more women take on those roles within their families and more women who want to be developers,” Jain said.

Encore Capital Management Taps CREC As Exclusive Retail Leasing Rep For $350 Million Project

Encore Capital Management, the developer of Plantation Walk, the $350 million mixed-use office, retail, residential, and hotel destination, has named CREC to manage leasing of the project’s nearly 200,000 square feet of available retail space.

“The retail component of Plantation Walk will set the project apart from any other destination in Broward County,” said Carol Brooks, President of CREC, Florida’s leading, independent, full-service commercial real estate firm.  “We’re excited to curate a retail lineup that reflects the needs of residents as well as the visitors who will frequent the project’s signature restaurants and shops. We’re looking for a mix of local flavor and national brands that provide the community with unique, creative and compelling options that have long been lacking.”

The firm is excited to bring in a specialty grocer as well as new-concept, chef-driven restaurants, health and wellness options and other retailers that will continue to infuse energy and excitement into the project.

Once completed, Plantation Walk will create a downtown-style destination that infuses resort-level hospitality throughout a walkable, seamlessly connected community of shopping, dining, entertainment, living and working.

CREC Senior Vice President and Director of Retail Steven Henenfeld and Vice President Rafael Romero will oversee leasing and marketing for Plantation Walk. The company enjoys a long track record of reshaping the retail blueprint of lifestyle shopping destinations throughout Florida.

“CREC has proven time and time again their in-depth understanding of South Florida’s retail landscape. The team’s creative approach to identifying the right brands will play a vital role in Plantation Walk’s success and we are excited to have them on board,” said Arthur Falcone, CEO and Managing Principal of Encore Capital Management.

Encore Capital Management began construction work on the new infrastructure in November 2017, which is located on site of the former Fashion Mall.

CREC to Lease Nearly 500,000 SF In Prominent South Florida Retail Centers



CRE-Sources | South Florida Commercial Real Estate News

CREC has been appointed the exclusive leasing agent for four prominent retail centers in thriving South Florida submarkets, totaling nearly 500,000 million square feet. The shopping centers are Greenery Mall in Kendall Drive; Pinecrest Town Center in the Village of Pinecrest; Palm Aire Marketplace in Pompano Beach; and Ridge Plaza in Davie.

“The addition of these retail centers to our portfolio is a direct result of landlords looking at our proven track record, the depth of our bench, and the dynamic approach we execute to lease centers throughout South Florida,” said CREC President and Co-Founder Carol Greenberg Brooks. “The power of our brand, inclusive of our high-level strategies and strong relationships, is what distinguishes us in the market.”

Greenery Mall is located at 7700 North Kendall Drive, one of Miami-Dade County’s primary retail corridors that is one block from Dadeland Mall, one of the nation’s top-grossing malls. The 129,514-square-foot retail center enjoys access to the Palmetto Expressway and other major thoroughfares, and is home to notable anchor tenants such as T.J.Maxx/HomeGoods, Starbucks, and Jo-Ann Fabrics, within a high-traffic area.

Pinecrest Town Center, at 12651 South Dixie Highway, is a 60,484 square-foot center located in one of South Florida’s highest-income neighborhoods of Pinecrest. It enjoys 305 feet of frontage along South Dixie Highway with substantial surface and rooftop parking. The tenant mix includes Chase Bank, Roasters ‘N Toasters, Edible Arrangements, and EWM Realtors International.

Palm Aire Marketplace, at 299 South Powerline Road, is an 140,312-square-foot retail center. It is located on the southwest corner of North Powerline Road and West Atlantic Blvd in a high-traffic intersection with easy access and visibility. The property is populated by a mix of national, regional and local tenants, and is anchored by Winn-Dixie.
Located at 8800 State Road 84, Ridge Plaza is an 155,204-square-foot retail center situated with excellent exposure to I-595/State Road 84. The center consists of a diverse group of retail, restaurant and entertainment and service tenants, including an 8-screen Paragon Theater.

“We successfully penetrate submarkets by collaborating with our extensive team to define opportunities and deliver tangible results, marketing each asset to satisfy the goals of our landlord clients throughout South Florida,” added Sabrina Stimming, senior vice president and director of leasing.

Doral’s Office Market Seeing ‘Unprecedented Rental Rate Growth’

Easily accessed by three major highways, the City of Doral has long been an ideal site for offices. In fact, the city says that 150,000 people per day come in just to work.

A residential boom over the past few years — the population rose by 26.1% from 2010 to 2016 — has also boosted the office sector. CREC Senior Vice President Doug Okun, who supervises leasing at Lennar Corporate Center, said there is a 91% occupancy rate in the city, and that space in a Class-A building can fetch $40/SF. “You’re looking at unprecedented rental rate growth in Doral,” Okun said. “Twelve to 18 months ago, deals were in the mid-$30s.” CBRE’s office market report from Q3 noted that tenants Sony Latin America, Caterpillar Latin America and Simply Healthcare all recently renewed or expanded leases for about 20K SF or more.  Okun said one of the things that offsets Doral is the parking ratio — three to five parking spaces per 1,000 SF of office space “at no additional cost,” he said — but Doral’s quick evolution as a live-work-play destination is also a factor. Codina Partners alone has built 5,000 housing units in Doral this decade, and a slew of other developers have followed, in turn triggering entertainment and retail. Per the mayor’s office, about 28% of the city’s population is Venezuelan, including exiles who have fled Nicolas Maduro’s regime.

“Five to seven years ago, to think that homes would sell for a million dollars out there would have been hard to believe,” Okun said. “Now there’s a more affluent demographic out there. Decision-makers live out there. It’s becoming a first-class city, 24/7. Along with that comes traffic, so they want to stay close to home.” Okun predicted that rents would stabilize this year, though, because many buildings have traded hands, and buyers who paid top dollar are now, in turn, pushing rents.  “Vacancy rates will come down,” Okun said. “Achieving that rental rate — in a lot of submarkets, some tenants feel pressure … They’re looking to move out, to sacrifice walkability, and go to the tertiary, suburban office market. I’m seeing more and more subleases. It seems that every week, I see more and more flyers from my broker friends handling subleases.” 

In the meantime, Doral Vice Mayor Ana Maria Rodriguez said that city officials are  focused on solving the traffic woes that have come with growth. Lately, she and her fellow commissioners have been focused on what they call “completing the grid”: connecting back roads to reduces pressure on the main arteries.  “We added seven or eight new streets in 2017 that were missing a little piece here and there,” she said.  She said that people are also making use of mass transit, so much so that a trolley system, which connects to the Metrorail, is at full capacity. “We have to add a new line every budget cycle,” she said.

Why Malls Should Add Residential To Their Repurposing Plans



Forbes

The retail apocalypse has not been kind to malls. Credit Suisse recently studied the state of mall-based retail and predicted that that about one-fourth of the nation’s 1,100 shopping malls — or roughly 220 to 275 shopping centers — will close by 2022. This is largely credited to the shift toward online shopping, which the bank predicts to capture upwards of 35% of consumers’ spend by 2030 and the resulting raft of brick-and-mortar store closures, that will reach 8,600 this year and more are expected to follow next year.

The traditional concept of a mall as a grand hall for shopping is becoming “a historical anachronism” desperately in need of reinvention, says Rick Caruso, CEO of retail developer Caruso Affiliated, which is responsible for the trend- setting LA-based The Grove at Farmers Market that offers outdoor retail, food, and entertainment centers.

Mall owners aren’t sitting idly by though, as they push the traditional mall’s boundaries beyond retail to create community centers that become destinations where guests can meet, eat, be entertained, and shop, if they feel so inclined. The new buzz word in the mall industry is “reuse” or “remix” where old retail spaces are made over for new, more relevant uses for today’s consumer culture.

Shopping alone or shopping primarily can’t be the reason why people will come to the mall anymore. With big increasingly empty spaces, ample parking, and access to major thoroughfares, malls are now asking “what else can these locations be used for?” says Peter Muoio, chief economist at Ten-X.

Among the answers to that question are dining experiences, beyond the ubiquitous mall food court; hotels and other services, such as dry cleaners, salons and barber shops; fitness, with gyms, yoga, Pilates and other workouts centers; recreational activities for families, such as rock climbing, children’s activities, even indoor water parks and amusement parks; and medical care uses. But one of the more revolutionary and promising concepts is adding live/work alternatives.

“Residential housing is one of the several options that developers are considering in order to revitalize failing mall properties,” Rick Rizzuto, vice president at Transwestern reports. “In today’s landscape, some are redeveloping mall properties to include residential units, while others are considering condos and apartments.”

The need is great and growing for accessible, affordable housing.

Market success hinges on finding a consumer need and meeting it. And that is what malls can do by adding residential into their mix.

Housing collocated in mall properties can capture growing demand from two of the key demographics looking for such accessible, convenient places to live: aging baby boomers and young millennials. The Harvard Joint Center for Housing reports that by 2035 more than one in five people in the U.S. will be aged 65 and older, and one in three households will be headed by someone in that age group.

“The housing implications of this surge in the older adult population are many,” says Chris Herbert, managing director at the center, “and call for innovative approaches to respond to growing need for housing that is affordable, accessible and linked to supportive services that will grow.” Mall properties could be well suited to meet these needs. Further it may offer opportunities for mall owners to bring in new retail, like grocery and pharmacy, and new services including medical and senior care tenants.

Affordable and accessible housing is also in great demand among millennials which forward-looking malls could be repurposed to address as well. In its new State of the Nation’s Housing report, the Harvard Joint Center for Housing Studies says, “Looking at the decade ahead, as the members of the millennial generation move into their late 20s and early 30s, the demand for both rental housing and entry-level homeownership is set to soar. The most racially and ethnically diverse generation in the nation’s history, these young households will propel demand for a broad range of housing in cities, suburbs, and beyond.”

By adding residential into the mall mix, the commercial tenants will find a new captive audience for their goods and services. “One of the main benefits is that residents will have restaurants, services and retail at their front door step. The close proximity to these uses will allow the consumer to utilize these almost as amenities,” says Steven Henenfeld, senior vice president and director of retail leasing at CREC.

How malls are redefining “living over the shop”.

By looking beyond conventional retail space, malls can untap tremendous value in those properties and become more relevant to their local communities. “While we’ve seen store closures increase in 2017, for the most part, malls are attracting new tenants through strategic marketing and property enhancements,” says Nick Hernandez, managing director of retail for Transwestern. “And in cases where a retail mall no longer makes sense, we have seen many owners successfully adapt to the changes in their trade areas by repurposing the mall for another use.”

Mall locations can be prime for residential uses. “Malls are typically located on or near an intersection of a high or a main street and are well served by public transportation,” Henenfeld notes. “That puts the residential properties at the center of town, allowing residents easy access to main roads and highway systems.”

CREC Sells Sunrise Shopping Center For Three Times Original Acquisition Price



CRE-Sources | South Florida Commercial Real Estate News


CREC announced that CPAC, a joint venture between CREC and members of the Lindemann Family, has completed the sale of University Shoppes of Sunrise in Sunrise, for $12.6 million, to Luxcom, founded by Oscar Barbara.

With this sale, which closed on November 20, the partnership achieved three times its original acquisition price.

CPAC acquired University Shoppes of Sunrise through foreclosure after purchasing the distressed note in 2012 at a significant discount. At the time of purchase, the property was comprised of a 135,011-square-foot retail center located on 13.2 acres, which included a vacant 103,480-square-foot former BJ’s Wholesale Club.

The partnership identified this purchase as a redevelopment opportunity and began to reposition the property to execute a ground lease with Aldi for a portion of the property. Upon completion of the new grocer, 9.2 acres of prime developable land remained, which CREC recognized as a prime suburban 222-unit multifamily development site and positioned the property for sale as such.

“This transaction adds yet another layer to the depth of CREC’s acquisition activity this year, further highlighting our ability to recognize opportunities that yield a robust return,” said CREC Chairman and Co-Founder Warren Weiser. “We saw tremendous value in purchasing the note for this property, at a low basis point that allowed us to evaluate the best use for its future, which we ultimately concluded to be multifamily. The execution of the sale was a strong land play, where we maximized value.”

“We continue to engage in high-level acquisition and sales activity with the benefit of providing our partnerships with full-service capabilities across our diverse product types and services, which includes the ability to seamlessly underwrite and execute deals across the state of Florida,” added CREC Co-Founder and President Carol Greenberg Brooks.
CREC Vice President Andrew Remick and Aztec Group Managing Director Peter Mekras represented the seller, CPAC.

The shoppers are coming

The shoppers are coming

Brokers say the shifting demographics of a growing population help make the case for prospective retail tenants to sign on the dotted line



By The Real Deal

In pitching new retailers on why they need to open a location at Downtown Dadeland, Continental Real Estate Companies’ (CREC) Vice President Rafael Romero presents a flyer featuring photos of the well-known local chefs behind four restaurants that have opened in the past 18 months at the retail and residential development in Kendall.

Romero tells prospective tenants about how restaurants like Barley, an American Brasserie; Harry’s Pizzeria; Pubbelly Sushi; and Ghee Indian Kitchen are reshaping the 7.5-acre Downtown Dadeland into a destination that will draw in affluent consumers from throughout South Florida as well as those living in the immediate area, where the estimated median household income is $137,237.

“Those establishments are part of a concentrated effort to create a restaurant row that has completely revitalized Downtown Dadeland,” Romero said. “To get them, we went to every chef event we could find in South Florida. If there was a croquet contest and they were there, we were there, too.” 

At a time when many brick-and-mortar brands continue downsizing or disappearing altogether from the American retail landscape, South Florida commercial brokers are courting tenants with sales pitches that focus on the region’s growing population and changing demographics.

The tri-county region added about 482,000 residents between 2010 and 2016, according to a March 2017 report by Florida International University analyzing recent U.S. Census figures. That growth has largely been fueled by immigrants —  the university’s report found that net international migration to the region increased 397 percent in that period. It remains to be seen how President Trump’s immigration policies could affect this trend.

To land some tenants, the brokers are working with landlords to revamp existing properties and configure new developments into experiential destinations. They’re also giving start-up businesses and established brands short-term leases to test out empty storefronts. And some good old-fashioned networking helps to land deals, too.

“Cold-calling and being a voice on the phone is not enough,” Romero said. “You need to get in front of them, show them pictures and explain the vision to get them to buy in. It is more than just promoting a building. You have to create a scene for them.”

To be sure, retail real estate is performing better in South Florid than in other parts of the country. Colliers International’s second-quarter retail report showed Miami-Dade’s vacancy rate was just 3.8 percent, Broward’s was 3.7 percent, and Palm Beach’s was 4.5 percent.  In comparison, the national retail vacancy rate rose to 10 percent in the same period, according to real estate research firm Reis Inc. And a recent report from online real estate marketplace Ten-X placed Miami and Fort Lauderdale in the first two slots of its top “Buy” markets for retail investors, forecasting  that the metropolitan areas will experience a combined 14 percent growth in net operating income by year’s end.

However, local asking rents are growing at a slower pace than the 3 percent national rate, per JLL’s 2017 spring retail report for South Florida. In the second quarter of 2017, asking rents only ticked up 1 percent in Miami-Dade, 2 percent in Broward and 2.7 percent in Palm Beach. The brokerage also placed Miami, Fort Lauderdale and Palm Beach among 15 cities that have reached the peak of the market cycle.

A more anecdotal sign that South Florida is not immune to the shrinking base of department, apparel and accessory stores is the fact that brokers are concentrating more on fitness tenants like indoor cycling studios and fighting gyms as well as entertainment providers such as bowling alleys and luxury movie theaters .

“There is not much deal flow for traditional apparel and trinket sellers,” Romero said. “These other categories have stepped in and given rise to the lifestyle center.”

Robert Granda, commercial brokerage Franklin Street’s South Florida retail director, said he is advising landlords he works with to target start-up business owners doing old school concepts like luxury barbershops and cigar bars.

“It could be a barber from Los Angeles or New York who is looking to open his first location,” Granda said. “Typically, landlords would like to see a track record. I will tell them men’s grooming and barbershops are hot tenants because they provide services that are driven by the experience of being there.”

To attract a retailer, some landlords are willing to offer short-term leases for pop-up stores, says Rod Castan, president of leasing and management for Courtelis Company. The property owner gets to temporarily fill an empty space while the tenant gets to test out a storefront, he explained.

“You will see landlords willing to take chances on incubating a retail concept,” Castan said. “That is a method we have used in Florida’s softer markets.”

For instance, House 2 Home Goods — a tenant at the Shops of Surfside in Cape Coral — opened under a three-month lease in February but in May converted to a longer term agreement, Castan said. In Miami, French macaron maker Ladurée opened a permanent spot in the Design District in June 2016 after testing out a two-month pop-up inside the Chrome Hearts boutique at 4025 Northeast Second Avenue during 2015’s Art Basel.

In other instances, the national retail slowdown means Castan’s team has to make more cold calls and do more face-to-face meetings with potential tenants. “We are rolling up our sleeves and doing old-school leasing … Our agents are on the road almost every day visiting other shopping center and trade areas looking for potential tenants.”

The promise of a development that has a social center is what gets many retailers to sign on the dotted line.

In Pembroke Pines, Courtelis has been successful in preleasing 75 percent of the 300,000-square-foot retail, entertainment and restaurant space at Pines City Center. Developed by Terra Group, the 47-acre mixed-use development is being built in two phases, with the first scheduled for completion by 2018. Major tenant signings include Publix, Carl’s Patio, Cooper’s Hawk, BurgerFi and Outback Steakhouse.

“These types of projects tend to have more attractive common areas and are better gathering places from a development standpoint compared to traditional shopping centers,” Castan said. “Bringing in ethnic, fast casual and healthy dining concepts is another way to make the projects more successful.”

Castan said he and his team show potential tenants renderings of Pines City Center to point out the features that will draw people in. “The center has transitional plazas between buildings and attractive rotundas, and the parking areas are planned to be more pedestrian-friendly,” he says. “These areas create gathering spaces where we can have pop-ups, art exhibits, music and other features that will make the shopping center more interesting to visit.”

Another large-scale mixed-use development that is following a similar retail recruitment strategy is Metropica, which has leased about half of its 485,000 square feet of retail. In all, the 4 million-square-foot development in Sunrise will have more than 2,200 residential units in addition to retail, dining and entertainment space, a wellness and fitness facility, a park and other recreational amenities.

“In the past, landlords would need a department store or a big box retailer as an anchor tenant,” says Sandie Witmer, in-house director of retail leasing for Metropica. “Today, the environment you create is the anchor.”

Witmer’s leasing team has been working on a curated restaurant collection as one of Metropica’s “environment anchor” concepts. “Retailers now look at the restaurant mix to see if it attracts different types of clientele,” Witmer says. “If they think someone eating there could be a customer, they want to be there, too.”

Using this strategy, the $1.5 billion megadevelopment has signed popular eateries like Harry’s Pizzeria, Bulla Gastrobar, Shake Shack and Fogo de Chao to go alongside entertainment tenants iPic Theaters and Kings Bowl and retailers such as Anthropologie and Kendra Scott Jewelry.

So far, retail leasing in South Florida remains strong enough and vacancy rates are low enough that brokers and landlords don’t need to offer “crazy concessions,” said CREC’s Romero.

“We’ve been in the single digits for a very long time,” he said. “Retail is very much alive.” 

Florida Shines Through

Florida Shines Through

The state’s retail growth corridors answer national wave of store closures with absorption, new developments.


By John Nelson, Katie Sloan and Camren Skelton

Master developer Miami Worldcenter Associates, led by Art Falcone and Nitin Motwani, will deliver Miami Worldcenter in phases over the coming years. The $2 billion Miami Worldcenter development is now under construction and will feature residential, retail, office and hospitality components.

Metro areas around the state of Florida are flexing their retail muscles with several high-profile projects that are popular landing spots for national and regional retailers and restaurants. Whether its Miami Worldcenter, Water Street Tampa, Butler Town Center or ONE DAYTONA, retailers and restaurants are flocking to these locations in droves because they’re attracted to the state’s employment growth, tourism and population growth, the latter of which is up by 9.6 percent from 2010 to 2016, according to the U.S. Census Bureau.

“We’re seeing net migration up across the board in Florida’s top metros,” says Brian Finnegan, executive vice president of leasing for Brixmor, a shopping center landlord with 55 properties in its Florida portfolio. “We saw a tremendous hit during the downturn, but now that’s up in all sectors — housing, tourism, employment. That’s been a huge plus for retail leasing, and we’ve seen it in our results. Our small shop occupancy in the state of Florida is up 350 basis points over the past two years, which is significantly outpacing the company average.”

It’s been an interesting summer for national retail real estate markets as landlords have had to adjust to the wave of store closures announced during the first quarter. For the most part, Florida’s retail industry specialists say that tight market conditions and favorable demographics have increased demand for the retail space that is becoming available.

“Florida is handling the wave of store closures relatively well. There’s still a significant amount of demand for retail space,” says Finnegan. “These vacant boxes are getting filled with better uses for the shopping centers. We had a Kmart deal in Naples that we replaced with Burlington, Party City and a Saks OFF Fifth. We look at what the community needs and we try to address that in our redevelopment efforts. When you do it right, it’s a win-win for everyone.”

Savvy retailers and restaurants are leading the charge in backfilling those stores and executing leases in new centers to take advantage of what the state has to offer, while also being mindful of the snares that can come with market saturation.

“Great retailers are taking action because they recognize the landscape is changing,” says Whitney Knoll, senior managing director of Crossman & Co., a retail leasing, brokerage and property management firm based in Orlando. “Publix is constantly thinking about what to do next, even though it’s the king down here.”

DEVELOPMENT DRIVES SOUTH FLORIDA

The retail sector is thriving in South Florida — developments are breaking ground, vacancy rates are low and rental rates are rising. From 2010 to 2015, retail sales grew by 34 percent in Miami-Dade County and are projected to grow by an additional 23 percent by the end of 2020, according to CBRE’s 2017 Southeast U.S. Real Estate Market Outlook.

The Miami market boasts one of the lowest availability rates in the country for retail space, according to CBRE, as well as one of the fastest rates of rent growth during the past five years. Retail property sales have slowed recently due to limited supply, and developers are filling the void with nearly 2.3 million square feet of retail properties currently under construction (and millions more in planning stages) around the Miami metro.

The upgraded Bal Harbour Shops will feature the first Barneys New York flagship store in the Southeast.
Rendering courtesy of Zyscovich Architects

Several large-scale mixed-use developments are underway in Miami, including Swire Properties, Whitman Family Development and Simon Property Group’s $1.05 billion Brickell City Centre and the $2 billion Miami Worldcenter by Miami Worldcenter Associates.

The first group of over 100 retailers and eateries opened last November at Brickell City Centre in the project’s 500,000-square-foot, open-air shopping center component. At completion, the development will include two condominium towers, two Class A office buildings and a hotel connected by Climate Ribbon, a $30 million elevated trellis of steel, glass and fabric that is designed to harness Miami’s bay breezes while deflecting direct sunlight.

Tenants at Brickell include a flagship Saks Fifth Avenue, Victoria’s Secret, Suit Supply, lululemon athletica, Cinemex, Coach, LIVE! and Porsche Design. A three-story Italian food hall that will feature a market, wine shop, gelato, cheese bar and restaurant is also set to open this year at the center.

Construction is underway on Miami Worldcenter, led by developers Art Falcone and Nitin Motwani. At completion, the project will deliver 450,000 square feet of retail, a 500,000-square-foot convention space, 600,000 square feet of Class A office space, a 1,700-room Marriott Marquis and 4.5 acres of open space. Both billion-dollar projects are set to deliver over the course of the coming years, and are transforming the retail landscape in Miami.

Roughly 20 miles outside Miami in Dania Beach, Kimco Realty is developing Dania Pointe, a 102-acre mixed-use project. The development is set to include almost 1 million square feet of retail and restaurants, Class A office space, hotels, luxury apartments and public event space.

Regency also has multiple developments and redevelopments underway around the Miami metro.

“Our redevelopment pipeline in South Florida is very strong and should keep us busy for a while,” says Tom Meredith, vice president, market officer at Regency Centers Corp. “We’re currently redeveloping Aventura Shopping Center, which is anchored by Publix roughly 15 miles outside Miami, and Countryside Plaza in Cooper City, roughly 23 miles outside Miami. We’re also redeveloping Pine Crest Plaza and adding a Whole Foods Market, as well as Point Royal shopping center in Cutler Bay.”

Redevelopment efforts are also underway at Bal Harbour Shops in Bal Harbour, about 12 miles north of Miami. Whitman Family Development recently gained final approval for a $400 million enhancement plan at the upscale 450,000-square-foot, open-air shopping center. The redevelopment will add 340,387 square feet of retail space, nearly doubling the center’s footprint.

The upgraded center is set to feature the first Barneys New York flagship store in the Southeast, upgrades to longtime anchor tenant Neiman Marcus and new dining options, including Freds at Barneys. The plan also calls for a new plaza at the shopping center’s main entrance.

Despite all of this new development, retail space is still very slim for tenants seeking to expand in South Florida.

“The climate for retailers in South Florida today is pretty challenged, simply because there’s not a lot of space,” says Sabrina Stimming, senior vice president and director of retail leasing at CREC. “Vacancy rates in the market today are just under 4 percent — around 3.7 percent. Landlords that have space available are definitely in the driver’s seat right now.”

Several markets across the metro are considered prime targets for expanding retailers.

Brickell City Centre’s 500,000-square-foot, open-air shopping center houses
more than 100 retailers and eateries, including a flagship Saks Fifth Avenue store.

“Wynwood is hot right now, mostly for restaurants,” says Stimming. “The most in demand markets are Brickell, Aventura and Doral. Solid, core markets with a history of retail performance like Kendall and Boca Raton are also seeing interest from retailers.”

Service tenants continue to expand at the highest levels around South Florida. “Boutique fitness and specialty medical tenants continue to expand throughout the market,” says Meredith. “The pizza craze is out of control and healthy eats concepts and breakfast chains like First Watch continue to expand. Even the wireless chains are back.”
The outlook for the foreseeable future is positive around the Miami metro.

“The market in South Florida is very strong, but deals are taking longer to get done,” says Meredith. “Demand for small shop space remains very strong here in South Florida. We are finding even the local mom-and-pops are becoming much more deal savvy, which is adding time to lease negotiations.”

“I’m positive about the market in South Florida,” adds Stimming. “We’re reading a lot lately about doom and gloom in retail, but we seem to be bucking the trend down here in South Florida due to strong fundamentals like population density, tourism, immigration, lack of land for development and just generally limited supply. Despite what we’re hearing nationally, retail is alive and prospering down here.”

CENTRAL FLORIDA DRAWS A CROWD

Tourism is alive and well in Central Florida, with a record number 68 million travelers coming to O-Town last year to take in Universal Studios, Walt Disney World and Sea World, among other destinations. That increased traffic has boosted retail and restaurant growth in the region.

“If the number of people moving here and vacationing here go up, retail follows,” says John Crossman, president of Crossman & Co. “We had a record year for tourism; more people came to Central Florida than New York City in 2016, and it’s not even close. And Disney and Universal keep adding attractions to their parks.”

At the same time, Orlando is hiring at an impressive clip. Total nonfarm employment in the Orlando-KissimmeeSanford region posted a 4 percent yearover-year growth rate in June, outpacing the state of Florida’s employment growth by 110 basis points and the U.S. rate by 240 basis points in that same time frame, according to the U.S. Bureau of Labor Statistics.

A lot of the employment growth is centralized in the Lake Nona and Hamlin districts, which are on every retailer’s radar.

“Existing retailers and new entrants alike have both Lake Nona and Hamlin at the top of their hit lists — all my clients want to be there,” says James Mitchell, senior vice president of CBRE’s Orlando office. “They’re both in the top 15 nationally in terms of new housing permits as well.”

In Lake Nona, a 17-square-mile development on the east side of Orlando — titled Lake Nona Town Center — has attracted high-tech employers like Amazon, Lowe’s Home Improvement is under construction on Narcoossee Road, and Super Walmart and Sam’s Club just opened. A Super Walmart also opened in the Hamlin community on the west side of town in the Winter Garden submarket. Publix and Cinépolis USA are opening new locations in Hamlin as well.

In addition to the rise in tourism and job growth, improving market conditions are driving Orlando’s new retail development. The metro experienced more than 500,000 square feet of net positive absorption in the first quarter and improved its vacancy rate from 5.3 percent to 5.1 percent, according to CoStar.

On the northeast side of Central Florida in Oviedo, Hill Gray Seven is underway on Stonehill Plaza. Mitchell is leasing the development and is seeing a lot of interest from national retailers.

“We’re already 80 percent pre-leased,” says Mitchell. “We’ve signed First Watch, Floyd’s Barber Shop, Burger Fi, Pacific Dental and Tazikis Mediterranean Café.”

To the south in Kissimmee, Williams Co. Southeast is developing a 225,000-squarefoot project pre-leased to Hobby Lobby, Outback Steakhouse and Panera Bread. The project is expected to open in October. Also in Kissimmee, Crossman & Co. recently inked a lease with Toys “R” Us to join The LOOP, an open-air shopping destination that is home to national retail brands such as Regal, CVS, Petco, Old Navy, Famous Footwear and Ross Dress for Less.

On the north side of town in Winter Park, several national retailers have backfilled a former Kmart anchor space within Sterling Organization’s Center of Winter Park, a 245,000-square-foot power retail center. Marshalls/HomeGoods, Ross Dress for Less and Five Below are taking nearly 100,000 square feet left behind by Kmart. Crossman says that backfill opportunities in Orlando’s infill markets like Center of Winter Park are hot commodities.

“The closing stores in the first quarter have been gobbled up — if a retail space becomes vacant it has been quickly snapped up,” says Crossman. “Those are gobbled up because there’s so much pentup demand.”

The growth is not limited to Orlando’s surrounding submarkets, as downtown Orlando has several high-profile attractions underway, including the 68- acre Creative Village development that will bring student housing, office buildings, a 15-acre campus for University of Central Florida, Valencia State College’s culinary institute and supporting retail and restaurant space.

The $500 million Dr. Phillips Center for the Performing Arts is undergoing a multimillion-dollar expansion, and in February Orlando City Soccer Club, Orlando’s MLS franchise, opened a 25,500-capacity soccer stadium about two blocks from the Amway Center.

“The Orlando City MLS stadium was received better than anyone could have imagined — the team actually increased the seating in the facility during the planning stages because of the amount of demand it received,” says David Barilla, assistant director of the City of Orlando’s Downtown Development Board and Community Redevelopment Agency. “Vendors downtown tell us that game nights are the most profitable. There’s a culture around the team, fans march down Church Street before the game and then take in the match. The hotels are also seeing an uptick during the international friendly games that the stadium hosts.”

Walgreens recently opened a Main-andMain location downtown at the corner of Church and Orange streets, and Earth Fare has also signed a lease for a new downtown location.

On the experiential front, Ace Café opened a new 35,000-square-foot location in June in downtown Orlando, its first in North America. The London-based restaurant concept brings together car and motorcycle enthusiasts, rock-and-roll aficionados and typical restaurant-goers in a “motor-diner” setting. The restaurant expects to host 400,000 people annually.

“Ace Café focuses on the motorist market by hosting events around cars and motorcycles,” says Barilla. “The restaurant will host a Mustang night, Corvette night, etc. People from a 500-mile radius will come down for those events to participate in those special evenings. The café also has a BMW store and Triumph store. It’s targeting its retail based on its target demographic.”

The first phase of construction for Water Street Tampa will begin this year, with over 4 million square feet scheduled for completion in 2020. Subsequent phases of the project are slated for completion by 2027.

ONE DAYTONA NEARS FINISH LINE

The most significant retail project in Daytona Beach remains ONE DAYTONA, International Speedway Corp.’s (ISC) massive mixed-use development located near Daytona International Speedway, home of the DAYTONA 500 NASCAR race. ISC recently invested $400 million to redevelop the racetrack and has since teamed up with Legacy Development to help bring ONE DAYTONA to fruition.

According to Chelsea Phelps, Legacy’s director of marketing, ISC is targeting both best-in-class and first-to-market retailers and restaurants within the project’s 300,000-square-foot retail and entertainment district. Rock Bottom Brewery will open its first location in Florida at the project, which will also house Guitar Center, P.F. Chang’s, Oklahoma Joe’s BBQ, Venetian Nail Spa, IT’SUGAR, Built Custom Burgers and Tervis, among others. ISC recently added Ben & Jerry’s, Sprint and Pink Narcissus, a Lily Pulitzer signature store to the tenant roster, which is becoming more dynamic daily.

“We’ve seen a lot of momentum not just on the leasing side but also overall opportunities present in the marketplace,” says Jeff Boerger, ISC’s vice president of corporate development. “We are planning to open in the fourth quarter of this year, and we’re confident we’ll open at near-to-full capacity. It’s nice to be in this position.”

In 2011, ISC purchased the nearby Volusia Point shopping center to hold as a redevelopment opportunity. The publicly traded firm is embarking on a $12 million campaign to renovate and rebrand the center, now known as Shoppes at ONE DAYTONA. New tenants signing on at Shoppes include First Watch, Zen Nails and Fantastic Sams, which opened in March. The existing Smoothie King store will undergo an exterior renovation as part of the redevelopment.

“Shoppes will remain more servicebased, and our existing tenants are excited about the redevelopment,” says Boerger. “It will help elevate the entire campus and create more jobs for the community.”

ONE DAYTONA’s two primary retail anchors, Bass Pro Shops and the 12-screen Cobb Daytona Luxury Theatres, have been open for several months and have driven significant traffic to the campus. Bass Pro Shops spans more than 67,000 square feet and in addition to its typical outdoor merchandise, features murals depicting nature scenes from the Daytona Beach area and the racetrack.

“The Bass Pro Shops and Cobb Luxury Theatres are exceeding expectations,” says Boerger. “We’re encouraged by the response. When the rest of the retail opens we’re sure the stores’ revenues will increase even more.”

Other uses at ONE DAYTONA will include a 145-room Marriott Autograph Collection hotel and a 105-room Fairfield Inn & Suites by Marriott property, as well as 276 residential units. ISC owns an additional 120 acres on the site that it will hold for additional development opportunities.

Like ISC, Sutton Properties is also underway on a retail project that will provide a one-of-a-kind atmosphere. The developer purchased a 38-acre tract at the entrance of Minto Communities’ upcoming Latitude Margaritaville, a 7,000-home development for adults age 55 and up that is inspired by singer Jimmy Buffett’s laid back, beach-centric lifestyle.

Situated off LPGA Boulevard near Interstate 95, the new 200,000-squarefoot project will feature a grocery anchor, service-oriented retailers and a Margaritaville restaurant in its first phase. Phase II will be more of a lifestyle center that will feature entertainment concepts, specialty retailers and dining with outdoor seating. The development will be designed to accommodate golf carts, which is expected to be the preferred method of travel for residents at Latitude Margaritaville.

“Retail in general may be a little more challenging than it was in the past, but with the Margaritaville brand support, it’s going to be a slam dunk retail development, and it will be very fun to do as well,” says Sam Sutton of Sutton Properties. (See page 52 for more.)

Other projects that opened recently include the 350,000-square-foot Daytona Beach Tanger Outlets mall that opened last November. On the investment sales front, Publix Super Markets purchased a Publixanchored center in New Smyrna Beach and Festival Properties Inc. purchased Volusia Marketplace, a 131,361-squarefoot center leased to Big Lots, Cost Plus World Market, T-Mobile, Panera Bread and Chipotle Mexican Grill.

Butler Town Center is Butler Enterprises’ open-air lifestyle development that will house retailers and restaurants
like P.F. Chang’s and a revamped Regal theater in a Main Street-style complex.

NEW MIXED-USE DEVELOPMENT TRANSFORMS TAMPA

Miami isn’t the only Florida city with a billion-dollar development in its pipeline. Strategic Property Partners (SPP) is underway on a $3 billion mixed-use project that is redefining Tampa’s retail market.

Water Street Tampa, the product of a real estate investment joint venture between Cascade Investment LLC and Tampa Bay Lightning owner Jeff Vinik, will span 50 acres and add over 9 million square feet to the Tampa Bay skyline. Located on the Garrison Channel and Hillsborough Bay in downtown, the development will feature office, retail, cultural, residential, entertainment and hospitality space, making it a true livework-play environment, according to John Stoner, director of leasing at Clearwaterbased Bruce Strumpf.

“The living units will be the driver,” says Stoner. “They will bring the restaurants, bars, entertainment, grocery, furniture, drug stores, title companies, insurance providers and the retailers that support the more affluent homeowner. It will have an environment where people will be living, working and shopping all within walking distance.”

The first phase of development on the property will break ground this year, with subsequent phases slated for completion by 2027.

“There is so much buzz around Mr. Vinik, and his vision for shaping Tampa into a ‘real metropolis,’” says Joe Morrow, investment associate at Tampa-based Franklin Street. “I’ve always thought of Tampa as a small town with the amenities of a big city — we have steady population growth, a low cost of living and a higher quality of life.”

Anticipation of Water Street Tampa has also prompted redevelopments in other neighborhoods in the region. In the SoHo district, one project will transform a former gym into a mixed-use development: The Morrison. Leasing of the development is being spearheaded by Franklin Street.

“When it comes to choosing a retail site, location, visibility and access are most important,” says Morrow. Located at 936 S. Howard Ave., The Morrison is situated within the walkable Hyde Park neighborhood, home to the upscale shopping and dining destination, Hyde Park Village.

The Morrison will feature 13,890 square feet of retail space, 6,950 square feet of office space and 46 residential units. Spanish-inspired tapas restaurant Bulla Gastrobar and Mediterranean chain Zoe’s Kitchen will open their first locations in the Tampa market at the development, and Club Pilates and Blind Tiger Café will open their second and third locations, respectively.

The Channel Club, a mixed-use development that will include 323 rental units and a 36,000-square-foot Publix, is currently under construction in Tampa’s Channel District. The project is scheduled for completion in December 2018. Blackwater Resources is underway on plans for Mitchell 54 West, a mixeduse development that will include shops, restaurants, a movie theater, Class A office space and roughly 800 homes. The 330- acre project is expected to break ground later this year.

Boutique grocers are also expanding their presence in the metro. Sprouts Farmers Market opened its first Tampa location at Carrollwood Commons shopping center in February, and has subsequently opened locations in south Tampa and Palm Harbor.

According to CoStar Group, 18 buildings totaling 126,935 square feet were completed in the Tampa/St. Petersburg retail market during the first quarter of 2017. CoStar reports that the metro’s rental rates ended the first quarter at $14.83 per square foot, representing a 2.6 percent increase from the fourth quarter of 2016 and a 5.9 percent increase from three quarters ago.

“We will continue to see a positive trend in Tampa’s retail rental rates,” says Stoner. “Occupancy is going to remain fairly steady and put an upward pressure on those rental rates.”

Retail vacancy decreased in the first quarter of 2017, ending the quarter with a positive net absorption of 467,579 square feet , according to CoStar. Over the past four quarters, the market has seen an overall decrease in the vacancy rate, going from 5.1 percent in the second quarter of 2016 to 4.7 percent in the first quarter of 2017. As the availability of retail space in the marketplace shrinks and both new and existing retailers and restaurants look to expand in Tampa, the search for the ideal location has become more competitive.

“In today’s market, you must be willing to pay, but you may not have as much time to analyze the decision as you once had,” says Morrow. “The space you may want will not be available for as long.”

Ford’s Garage, a restaurant chain licensed by Ford Motor Co., is one of the restaurants expanding its presence in the Tampa region. The development is located in Wesley Chapel’s planned mixed-use development, Cypress Creek Town Center. With Model Ts hanging from the ceiling, smoke coming out of the mufflers and car horns that actually honk, the restaurant caters to the experience consumers are craving from today’s retailers.

“You go in and see antique gas pumps,” says Stoner. “They have all of the old replicas — you can even eat in the bed of an old Ford pickup truck.”

Other planned restaurants in Cypress Creek Town Center include Chuy’s, an Austin, Texas-based Tex Mex restaurant, and Mellow Mushroom, an Atlanta-based pizza chain. German-based grocer Aldi and an organic boutique grocer have also proposed plans to build within the development.

GAINESVILLE SOARS

The newest iteration of the massive Butler Enterprises development at Interstate 75 and Archer Road in Gainesville is Butler Town Center, an open-air lifestyle development that will house retailers and restaurants like P.F. Chang’s and a revamped Regal theater in a Main Street-style complex. Set to open by late 2018, the project will be bookended by two apartment developments known as The Terraces at Butler and The Residences at Butler.

On the ground floor of The Residences will be North Central Florida’s first food hall, Stengel Field Food Hall. The site of Butler Town Center was once Stengel Field, a dirt airstrip that opened in the 1920s during the golden age of aviation when legends like Charles Lindbergh and Amelia Earhart were in their heyday.

The 13,000-square-foot food hall, which will feature a Pitts Special acrobatic airplane hanging from the rafters, will house between 11 to 15 vendors, including chef Bert Gill’s L’Avion French bistro concept, which translates to “The Plane” in English. Food halls can be a transformative addition to the community fabric, but Deborah Butler, owner of Butler Enterprises, warns that food halls are not simple undertakings.

“At a food hall you have to have restaurant management; it demands it because it’s a different animal,” says Butler. “You’ve got to do your homework because it’s not a simple food court.”

Gill will oversee the operations of the food hall and curate the vendor mix. The food hall is expected to include kiosks for fresh flowers, fruits and vegetables, a craft beer taproom and a rotating list of food concepts.

The new food offerings are expected to pair well with the center’s new Whole Foods Market. In April, the grocer scratched its plans to open a 29,000-squarefoot Whole Foods 365 concept at Butler Town Center, instead opting to develop a typical 41,000-square-foot Whole Foods Market location. The new store will be the first Gainesville location for the Austinbased grocer, which was recently acquired by Amazon in a $13.4 billion deal.

“Gainesville is ripe for a high-end grocer and we have the spending power to support it, it’s a great fit,” says Butler. “We’re looking at retailers that understand that people want the latest and the greatest and know how to reinvent themselves to keep up with what people want.”

According to Butler, the new Whole Foods has helped spur additional interest in Butler Town Center from retailers because it’s a known entity and is widely admired by customers. Ray Hayhurst, senior vice president of Avison Young’s Orlando office, feels Gainesville has proved to be a popular landing spot for grocery concepts of all kinds.

“Given the demographic makeup of the city, it is not surprising that many of the specialty grocery chains have opened stores in Gainesville, including Luckys Market, Earth Fare, The Fresh Market and Trader Joe’s, along with several local specialty grocers,” says Hayhurst.

Gainesville’s retail market is in a favorable position for new construction as its fundamentals are trending in the right direction and there are barriers to entry due to the city’s infamously long entitlement process. About 2.4 million square feet of retail space was delivered in the past 12 months, according to CoStar. That figure is more than three times the five-year average of 653,794 square feet.

“The Gainesville market is so unique to other Florida metros because of the 12-county region. We’re the heart and economic hub of North Central Florida,” says Butler. “Gainesville is ready for more development.”

The market is absorbing the new wave of construction and then some, with absorption totaling nearly 2.5 million square feet in the past 12 months, more than four times the five-year average, according to CoStar.

Landlords like Butler Enterprises are able to push rents in Gainesville. According to CoStar, triple-net rental rates ended the first quarter at $16.84 per square foot, up nearly $3 per square foot over the trailing five-year average. The metro’s vacancy rate was 3.7 percent at the end of the first quarter, down 150 basis points compared to the five-year average.

Butler’s success is partly owed to the nearly 50,000 students at the University of Florida (UF); Santa Fe College, which recently became a four-year institution; and the medical care community including University of Florida Health Shands, the Malcolm Randall Veterans Medical Center and North Florida Regional Medical Center. UF Health will also open a $415 million project involving new heart and vascular and neuromedicine hospitals in 2018. The healthcare and higher education communities have provided the spending power to support the Butler development, as well as Celebration Pointe, a massive mixed-use project underway on the other side of I-75.

In May, Celebration Pointe Development Partners announced a group of restaurants and retailers that will open this fall during Phase I of Celebration Pointe. The new tenants will be situated in the development’s City Walk section near the new Bass Pro Shops, which opened in November.

The restaurants include Liquid Ginger Restaurant; Miller’s Ale House; Kilwins Quality Confections; Reggae Shack Café; and MidiCi Pizza. The retailers include Lee Nails, Azulene Day Spa and Uniform Destination.

Other uses at Celebration Pointe will include nearly 1,000 residential units, a 140-room Hotel Indigo, 300,000 square feet of office space and a new Regal theater.

GROWTH IN JACKSONVILLE

As with other cities in Florida, Jacksonville is experiencing strong population and wage growth. The market has experienced a 2 percent growth in population annually over the past two years. That same pace is expected to continue for the next several years, according to CBRE’s 2017 Southeast U.S. Real Estate Market Outlook.

Wage growth was 10 percent over the previous year in 2016 according to CBRE, and supply and demand metrics are still well below what was seen in 2006 in Jacksonville, indicating that the market as room for expansion and a population with a growing level of discretionary income.

Occupancy rates have gone up yearover-year to 91.1 percent and the retail sector currently has 748,000 square feet of new space under construction, according to JLL’s 2016 Florida Retail Report.

An upcoming mixed-use development in St. Johns County, roughly 30 miles outside Jacksonville, titled the Pavilion at Durbin Park is looking to add 2.4 million square feet of retail to the Jacksonville market. The project by Gatlin Development Co. and Gate Petroleum will also include 2.8 million square feet of office space, 999 multifamily units and a 350-key hotel. Plans for the property also include green space, bike trails, lakes and entertainment venues.

Regency Centers Corp. is also wrapping up several developments around the Jacksonville metro. “We are finishing up a few developments in town,” says Patrick McKinley, vice president, market officer at Regency. “We are adding 27,000 square feet of retail at our Nocatee Town Center project in Jacksonville. Notable tenants include Starbucks Coffee, Orangetheory Fitness, Tijuana Flats, Jersey Mike’s and a few locals like Artsy Abode, Gwen Berlin and Timoti’s Seafood Shack. We will be complete with landlord work in August, and we are already 97 percent leased.”

“We are adding a First Watch pad building in our Bartram Park Shopping Center and we are close to finishing our redevelopment at Old St. Augustine Plaza where we eliminated small shop space to make way for a LA Fitness pad,” continues McKinley. “We are also about to add an additional 10,000 square feet of space at our Seminole Shoppes project in Neptune Beach. Kickoff is set for August with an early 2018 delivery.”

Much of the space that comes on line in Jacksonville is quickly absorbed. This is the fourth year of strengthening net absorption for Jacksonville, and demand is expected to be stable in the most sought after submarkets, according to CBRE. Vacancy has also trended down below 6 percent.

“The activity for space in well positioned and well-merchandised, grocery-anchored centers is strong,” says McKinley. “To give you a sense, we had five move outs in the second quarter. Three of the spaces have newly signed deals, one is at lease and the other is currently being marketed.”

Hot neighborhoods in Jacksonville that are expected to continue to see strong demand are the Beaches, Town Center, Nocatee, North St. Johns County, San Marco, Riverside and Brooklyn, according to McKinley. “Certain markets are getting over restauranted,” he says. “There are a handful of markets around town that hit all the hot buttons for restaurants with strong performing restaurants in operation. The problem is that the restaurants still keep coming and the proverbial pie is just getting split up into smaller pieces. Great operators with unique food, first class service and of course good food will be fine, but run of the mill operators will start to feel the squeeze in these markets over the next 12 to 18 months.”

With supply scarce, Doral offices are 91% full, prices rising

With supply scarce, Doral offices are 91% full, prices rising

Week of Thursday, August 3, 2017

By Katherine Lackner

Codina Partners build 8333 Downtown and has three more office buildings on the way in a tight market.

With scare supply and no new product in the pipeline, the Doral office market continues to be robust, observers say.

“Institutional capital now accepts that Doral is a mature, exciting and deep market, and one they want to be in,” said Doug Okun, Senior Vice President at CREC. “It’s become a first-class city.”

The new residential stock “is a driver,” he said, as are the ever-increasing amenities, including retail, schools, restaurants and infrastructure. Most buildings offer plentiful parking, which is not the case in urban markets or even some suburban markets, he said.

With about a 91% occupancy, pressure is being put on lease prices and concessions are becoming rarer, he said. Space in a class A building can fetch $40 per square foot, “which was hard to image five or 10 years ago,” Mr. Okun said. Class B space leases in the high $20s or low $30s per square foot, he said.

Most developers consider mixed-use projects or residential units to be the highest and best use for their land, he said. That, combined with high construction costs, suggest that the dearth of new office buildings will continue, further driving up demand for existing space.

“I remain bullish on the Doral office market,” Mr. Okun said. “I think it will continue to get better, and almost every data point supports that.”

“We are witnessing Doral become more of an urbanized environment,” said Ericka Witkowski, associate with Avison Young. “The ‘live-work-play’ play dynamic, in addition to the already acclaimed economic benefits of leasing in Doral, is really creating the ideal ambience that attracts major corporate headquarters. That will continue to grow this submarket. Doral continues to be one of the most sought-after markets in South Florida, which is attested to by a less-than-9% vacancy rate.”

“County-wide year-to-date leasing activity remains up 6% year-on-year, driven to a notable degree by non-CBD submarkets that had been unsettlingly quiet through 2016,” said JLL’s second-quarter 2017 office market report. One of the larger deals inked that quarter was the Everest Business Funding lease of 27,000 square feet in Downtown Doral, the report noted, but, on the whole, transactions were smaller.

JLL lumps Doral into the Miami Airport submarket, where rents overall are $30 per square foot and vacancy is 9%, according to the report. Class A space in that submarket can be had for $33 per square foot (and the vacancy rate is 8%), while class B space leases for $27 per square foot and the vacancy rate is 11%, the report said.