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Burp in storefront vacancies called no cause for panic

A store at 667 Central Ave. is for rent, one of many empty shops in downtown St. Petersburg and along Fourth Street as vacancies spurt.

SCOTT KEELER | Times

A store at 667 Central Ave. is for rent, one of many empty shops in downtown St. Petersburg and along Fourth Street as vacancies spurt.

If you think you're seeing more empty storefronts and "for rent" signs, you're not mistaken.

"There's definitely more vacancies downtown and on Fourth Street than there were three or four years ago," said Scott Dobbins with Gulfcoast Commercial Real Estate. "There's not as much aggressive activity as there was."

Though no cause for panic, the retail vacancy rate has been ticking up in the past few months throughout Pinellas County, rising as high as 6 percent, according to CoStar data supplied to the county's economic development office.

As the national economy dips toward recession, businesses pull in their horns, leasing agents say, and the churn of filling space slows, leaving empty windows.

"It seems like people today are waiting for something to happen," said Michael Seimetz of Coldwell Banker on St. Pete Beach.

"It's a natural thing the way the economy is. People are hesitant to go into business."

Seimetz has focused on sales, as well, lately, noting that some small businesses close or seek to sell off. But the vacancy trend is still early and hasn't hit all sectors.

"I'm not dealing with any of that yet," said George Lewis, a leasing agent with Broderick and Associates in Pinellas Park. "I'm not hearing any nervousness from my clients, but I'm hearing it from everyone else."

Lewis, a partner in the Leverock's seafood restaurant in South Pasadena, says business there is strong. But at the same time, he has seen other establishments struggle. Three restaurants are empty at the very busy intersection of Park Street and Tyrone Boulevard.

Retail activity is down, but spotty, because it follows housing trends by a year or more, said Patrick Berman, senior director at Cushman & Wakefield, a retail brokerage firm.

The housing sector has been down a long time now, and retail is starting to feel it, he said. Berman said the vacancy rate for south Pinellas was 6.1 percent at the end of last year, according to his firm's figures, but that number jumped almost 1 percentage point from the previous quarter's 5.3 percent.

The rate is historically low, he said, but the jump represents 66,000 square feet freshly on the market. And this year is trending the same.

"Anything below 10 percent is still considered a healthy market, but a jump of 80 basis points, that's sizable," Berman said. "It's been flat around 5 percent for a long while, but I expect it to get up into the mid 6's this quarter."

Most of the damage has come in stand-alone buildings or small sites, Berman said, which is good. When malls start showing holes, that's when retail is in serious trouble, and the numbers don't show that.

In fact, in the aggregate Pinellas County is well situated for retail growth. There may not be great demand right now, but overall the county is underserved.

Berman said the industry standard is that every person in a community can support 22 square feet of shopping. With the county's total of about 20-million square feet, its population of nearly a million wants more shopping. Even possible additions of large centers at the Toytown landfill and a redeveloped Tropicana Field site would still not satisfy the overall appetite for shopping.

"It's all timing," Berman said. "I wouldn't open those places now, but in two, three, or four years, when those (malls) could be ready, the market should be in full recovery."

Even now, leasing agents say there are still areas of strong demand. Lewis said he has been signing leases steadily for several months and still has good interest. Dobbins, too, says national food chains, especially, are eager for Fourth Street locations. Clearwater Mall, Parkside in Pinellas Park and the Feather Sound area also remain popular.

"Certain pockets are recession resilient," Dobbins said. "As a general rule, we still have more demand than inventory."

Paul Swider can be reached at pswider@sptimes.com or 892-2271.

Burp in storefront vacancies called no cause for panic 03/15/08 [Last modified: Monday, March 17, 2008 10:19am]
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