Retail Leasing Modest
Is the market saturated?
by Laurel S. McQueen

THE REGION'S RETAIL LEASING MARKET DRIFTED THROUGH SUMMER into fall with modest activity. Manatee and Sarasota counties each recorded noteworthy gains in net absorption, while Pinellas and Pasco each fell into net occupancy loss territory, and Hillsborough stagnated.

Manatee County recorded the region's highest net absorption, more than doubling the level of the previous period. Most of the gain was at Lakewood Ranch Gateway Center. Manatee's 25 neighborhood centers saw net absorption of 74,560 sf resulting in an 11.5 percent vacancy rate. The market's ten community centers are 2.3 percent vacant and had 2,000 sf of net absorption. The county's weighted average rental rate was up $.52 per sf. Removing the county's three regional malls from the numbers, the vacancy rate is 9.3 percent.

Sarasota County's net absorption was more than four times the previous period's level. Construction was completed on University Walk, which is 99 percent leased. Construction started on Publix at Northridge, which is 66 percent pre-leased. The county's 17 community centers are 3.9 percent vacant having absorbed 23,970 sf since March, while the 23 neighborhood centers are 9.1 percent vacant and netted 22,980 sf. Sarasota continues to have the region's highest weighted average rent, although the average dropped $.12 per sf since March. Factoring the county's two regional malls out of the statistics, the vacancy rate is 6.6 percent.

Hillsborough County just barely made it to the plus side of the annualized net absorption equation. Absorption at International Plaza dropped out of the twelve-month moving aver- age. Discounting the mall, annual absorption dropped 17 percent. Leaving the county's five regional malls out of the statistics, the vacancy rate is 6.6 percent. Hillsborough's 37 community centers lost a net of 14,060 sf for the period, 82,570 sf annually. Among the 81 neighborhood centers the loss for the period was 14,349 sf, but on an annual basis they are up 47,090 sf.

Pinellas County managed to pull its annual absorption level back to the plus side after two years in negative territory. Among the 32 Pinellas community centers there was a net occupancy loss of 76,860 sf since the last reporting period resulting in a vacancy rate of 7.9 percent.

The Tampa Bay region has at least 23 empty big box spaces (30,000 sf or more) at the various shopping centers. This does not include the freestanding empty big boxes that dot the area.

Combined these 23 boxes total more than 1.1 million sf. Some are sublease spaces, some vacant and direct; many are related to the various bankruptcy filings that have plagued the retail industry the last few years.

The Tampa Bay region may have reached a point of saturation in retail space. Based on 2001 population and household demographics, the Tampa Bay region has 38 sf of shopping center space per household (excluding regional malls and centers under 40,000 sf). In the past five years 6 million sf of retail space (excluding regional malls) has been added to the market while 117,800 new households have been added to the region. This translates to a rate of 51 sf of new retail space per new household.

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. For a complete survey call MADDUX Research Department at 727/321-3225 or e-mail at Maddux Research@AOL.com.