Just Where Is the Bottom?

by Laurel S. McQueen MADDUXResearch@aol.com

Move-outs the last six months continue to plague Tampa Bay’s retail market. Six more anchor boxes were vacated, and several more are slated to close during fourth quarter as Publix consolidates the purchase of its Albertson’s portfolio. The region’s annualized loss approached 1-million sf with only Pasco still flashing positive.

The last two years have been rough (no news here). During that time, only Pasco had a gain, that being 1.05-million sf. Net losses elsewhere over the two years are: Hillsborough – 466,600 sf; Sarasota – 414,800 sf; Manatee – 200,300 sf;
Pinellas – 146,000 sf.

Published lease rates declined only slightly, but agents across the region report they are cutting rents substantially to get new tenants. To retain tenants, some landlords even are offering free rent for a time just to keep their centers looking busy.

In Pasco, new space was leased at Cypress Creek Center in Wesley Chapel, and Zephyr Commons opened in Zephyrhills with Publix as an anchor. (Meanwhile, the Publix at nearby Townview Square closed.) Despite its positive growth, Pasco continues to carry the region’s highest vacancy rate.

Hillsborough breathed a little easier this period with losses onesixth that of the previous period. The Northeast submarket had the county’s biggest decline, but no anchor space was involved. To the south, Phase II of Summerfield Crossings opened with a 90,000-sf Bealls store, which pushed the South & East submarket to a positive volume, but barely.

In Pinellas, the rate of decline also decelerated this period, to about one-fifth the volume reported last period. North county took the greatest hit when the K-Mart at Tarpon Springs Mall closed, doubling that submarket’s empty big-box space. Highlands Shopping Center was added to the survey with nearly all of its local space vacant. The vacancy rate here climbed 2.5 points.

Activity in mid-Pinellas was positive this period: Clearwater Mall snagged one of the region’s new hhgregg appliance and electronics stores, re-filling the box vacated earlier by Linens n’ Things. South Pinellas benefited from the opening of a Publix in Shoppes at Royale in St. Petersburg. Just up the street, DeSears Appliances took over the empty anchor box at Crosswinds.

Of all counties, Sarasota took the biggest hit this period despite the opening of University Park Center with its new Kohl’s and Fresh Market. Three anchors and two junior anchors were closed around the county; its vacancy rate climbed 2.8 points.

In Manatee, move-outs were noted at 10 locations in Manatee, but none involved anchor or big box space. The county’s losses this period were less than in either of the two previous periods. (With this survey, the Shoppes at University Square was moved from Manatee into Sarasota.)

This six months, the region’s vacant big-box space grew by 40 percent from last period, to more than 1.6-million sf. This is reflected in our analysis, but we break it out separately because it’s a major trend. The chart below indicates the total big-box space that’s vacant in each county and the number of spaces represented. Big boxes are defined as spaces of 30,000 sf or more.

Shopping centers fully leased for two or more periods do not appear in the survey charts. All shopping centers with at least five tenants and a minimum of 40,000 sf 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.