Braking the Slide

by Laurel S. McQueen MADDUXResearch@aol.com

YES, RETAIL LEASING ACROSS THE REGION softened this period from a strong position six months ago. However, the current annual volume of 899,000 sf still ranks among the best 12 months reported in the last decade, if you were to discount the impact of two major malls – Tampa’s International Plaza and Westfield Citrus Park – coming on stream in 2001 and 1999, respectively. There is a big difference in today’s retail market, though. A decade ago, leasing activity was usually led by Hillsborough and Pinellas counties. Right now, the lead pack is Pasco, Manatee and Hillsborough.

Pasco experienced both its best six months and best 12 months since MADDUX BUSINESS REPORT began surveying that county 12 years ago. And Manatee’s annual volume is the best in five years despite a sharp drop (61 percent) this period from six months ago. Meantime, the six-month activity of two other counties, Hillsborough and Sarasota, shrank by more than 60 percent.

In Pasco, the 67,000-sf Arbor Square is now open in Connerton and a new specialty center opened in Trinity. The county’s 15 community centers netted 52,800 sf of absorption; its 38 neighborhood centers gained 67,300 sf; and the strip/specialty center sector grew by 74,800 sf. Overall, the county’s vacancy rate has dropped by 2.1 points from a year ago to 8.8 percent. Meantime, average rents in six months have climbed by $.74 per sf while the common area maintenance (CAM) fees rose $.84 to $5.13 per sf.

Manatee’s activity needs a quick explanation. We discovered after our May report that the 215,000-sf Center Point Commons had in fact opened during that period. Consequently, the data was adjusted to reflect that opening, which changed the county’s leasing volume from a negative 10,000 sf, as then reported, to a positive 190,100 sf. Thus, this period the leasing volume was off by 61 percent from the adjusted volume of six months ago, despite Office Depot’s move into the long empty Winn Dixie box at Braden River Plaza. The county’s average rents actually dropped by $.64 per sf, an aberration for the region. The average CAM fees, however, climbed by $.76 per sf.

Hillsborough’s volume this six months dropped 76 percent from the previous period. But annual absorption was up slightly because results from the same period a year ago were even less. Meantime, weighted average rent climbed a whopping $1.71 per sf while average CAM costs moved up only $.14 per sf. Only the county’s northwest market experienced growth this period, and that by only 17 percent.

For 18 months now, Pinellas has experienced a net loss. Its 12- month loss is at about 41,000 sf. The average rent climbed $.79 per sf and the CAM $.24 per sf. Mid-county was again the only submarket to grow; meanwhile, north county now has experienced losses over a two-and-one-half-year period. Sarasota’s six-month results barely scratched the plus side. Nevertheless, this was better than the same period a year ago, so annual absorption climbed 92 percent. The average rent is up $.65 per sf and CAM charges $.18 per sf.

The total vacancy of big box space in the market contracted by a third. This space – 30,000 sf or more – is reflected in the analysis numbers, but we break it out separately because it shows a major trend. The chart below indicates the total big box space in each county and the number of spaces represented. Parts of seven of these boxes have been re-leased to smaller tenants.

Shopping centers fully leased for two or more periods do not appear in the survey charts. All shopping centers continue to be updated in the database each half-year. For more detailed information on the survey call MADDUX BUSINESS REPORT Business Report research department at 727.321.3225 or email MADDUXResearch@AOL.com.