Friday, May 25, 2018
Business

Empty storefronts: the vacancy rates keeps getting better

The retail vacancy rate in Tampa Bay has improved as shopping center landlords see their business perking up from a slump now in its fourth year.

"Our survey found half the local industry executives saying, 'Things are getting better,' while the rest say, 'It's not as bad as it was," said Justin Greider, research director at Crossman & Company who compiled a market report for the International Council of Shopping Centers trade group. "Either way, we're headed in the right direction."

Indeed, the local vacancy rate for storefronts is 10.3 percent, down from 11.5 percent a year ago, while rents held steady at $13.67 a square foot, well below what it was before the market tanked in 2008.

The change in vacancy rates might not sound like much, but it's enough storefronts to fill almost two malls the size of WestShore Plaza. And while areas like downtown Clearwater and south Tampa are close to fully leased, the average is dragged down by worse than average spots like downtown Tampa and St. Petersburg, overbuilt parts of Pasco County and neighborhoods plagued by obsolete, old strip centers.

Indeed, the marketplace is uneven. While the regional malls are close to full, big box stores centers are still trying to replace empty Blockbusters, Borders, GameWorks and Kmarts.

"The market has stabilized, but new construction is pretty much limited to filling existing centers, supermarkets and a few standalone store projects," said Greg Sembler, chief executive of Sembler Company.

New construction is slowly starting to come back. Sembler locally is rebuilding Park 66 Plaza in Pinellas for a Walmart Neighborhood Market. Whole Foods Natural Markets is building its second area store in Northdale. Casto Development is building Ibis Walk in St. Petersburg with a commitment from Dollar General. There has also been an upsurge in new filling stations, auto parts dealers and quick-serve restaurants.

Much of the activity is in the trenches where small centers are finding new tenants or converting space for offices and services.

"The market is getting better, but it's coming back differently," said Lenore Reynolds, vice president of Bruce Strumpf Realty. "We're signing a lot of immigrant retailers: Vietnamese, Mexicans, Koreans, Chinese and Middle Eastern. They pay cash."

Meantime, there's chatter that Simon Property Group, the nation's largest mall operator, is working on a deal to rejuvenate its stalled outlet mall in Pasco County.

Simon Property, which also owns Premium Outlets Ellenton, is talking about moving its Pasco project 15 miles south to the site of Cypress Creek Town Center in Wesley Chapel, a shopping center project halted four years ago by environmental disputes and a lack of tenants.

The principles won't confirm anything. But Simon did let its contract for the earlier site at Interstate 75 and SR 52 expire and this month resumed advertising in the outlet industry trade magazine for tenants for a Tampa project.

Mark Albright can be reached at [email protected] or (727) 893-8252.

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