Retail Mixes Signals
by Laurel S. McQueen

THE MID-YEAR RETAIL-LEASING PICTURE IS A MIXED BAG ACROSS five counties of the Tampa Bay region. It is highlighted by the opening of a new high-end mall, but suffers by chain bankruptcies and closings. International Plaza opened, with its local space 81 percent leased, in Hillsborough during third quarter, boosting the area's super-regional mall space by 18 percent.

But during the year, over a million square feet of space was vacated by Montgomery Ward. Since the six stores in the market are owned by the company and now controlled by the courts, this space is not recorded as a loss in occupancy for our absorption figures. Nevertheless, this empty space seriously affects traffic at the six centers involved.

In June, bankruptcy shuttered four Home Place stores, vacating approximately 160,000 sf across the region. The space at two locations is reported as a net loss in occupancy. A third is a sublease controlled by the court and the fourth a sublease, so it reverts to the company that originally vacated the space.

Without the influence of the new mall, Hillsborough's net absorption for the period was a paltry 14,760 sf. Numerous small move-outs were recorded. More can be expected as the economy continues to soften. Hillsborough's weighted average rent rose $.20 per sf. Average rent for its 36 community centers increased $.28 per sf, while at 82 neighborhood centers the average rose $.27 per sf.

Pinellas County's net periodic absorption dropped back into the loss column. Over the last two years now Pinellas has seen a net drop in occupancy of 243,620 sf. Three of the recently closed Home Place stores were in Pinellas, with the space at Gateway Marketplace and Seminole Mall hitting the market as direct space. Pinellas' weighted average rent also inched up. Over-all average rent moved up $.09 per sf, while rents at the county's 32 community centers jumped $.49 per sf. At the county's 65 neighborhood centers the rate increase averaged $.16 per sf.

Manatee County saw the opening of the new Creekside Crossing big box center during second quarter, boosting the county's annual net absorption from a net loss in occupancy of almost 92,000 sf to the current positive level of 344,550 sf. The county's weighted average rent climbed $.41 per sf. At the county's ten community centers, average rent soared $1.01 per sf, while at the 23 neighborhood centers average rent was unchanged.

Sarasota County recorded solid net absorption fueled by the completion of the expansion of Gulf Gate Mall. Sarasota's weighted average rent soared $1.35 per sf. At the 17 community centers the rent actually dipped $.24 per sf. The county's 20 neighborhood centers saw the average climb $.27 per sf. The county's eleven strip/specialty centers rose a dramatic $1.67 per sf, causing the increase in the total county average.

Pasco County finally had a reasonably good two-quarter period of net absorption, but it wasn't enough to pull annual absorption out of the hole. Over the last two years now, Pasco has seen a net loss in occupancy of 64,750 sf. Average rents declined a slight $.04 per sf.

Across the region a number of anchor spaces are empty, but remain under lease. This space is not reflected in the regular vacancy rates for the counties. The figures in parentheses below indicate what each county's vacancy rate would be if this vacant anchor space were accounted for. Hillsborough 478,400 (9.2%) Pinellas 404,700 (10.7%) Manatee 62,100 (9.4%) Sarasota 76,700 (6.6%) Pasco 150,000 (12.1%) Shopping centers that have been 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.

NOTE: Office buildings fully leased for two or more quarters do not appear in the survey charts. All office buildings are updated each quarter. Previous quarterly data is revised as new information is received. Survey charts may include sublease space, which is not included in analysis numbers.
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