Retail Taking a Breather This Year as New Construction Expected to be Down 50%

ORLANDO-The party isn’t over for Central Florida’s burgeoning 46.16 million-sf retail market but the players are easing up on the development pedal this year, according to new separate analyses by the Tampa-Orlando office of Marcus & Millichap and the Orlando division of Grubb & Ellis Co. For example, only 5.8 million sf of new product is predicted for this year, half of the 2000 volume. Single-tenant construction will be down considerably from a high of 125 projects in 1999.

“Fast-food chains such as Burger King, McDonalds and Chic-Fil-A saw some activity, though it is clear that Orlando, particularly along the tourist corridor, has become saturated for the moment,” Steven M. Ekovich, vice president/regional manager, Marcus & Millichap, tells GlobeSt.com. “Major single-tenant construction will likely not occur for at least another year.”

The construction decline eventually will help the occupancy numbers, the studies project. The current 6.4% vacancy level, though, is first expected to rise to 6.9% in 2001, then drop to 6.7% in 2002 as much of the new inventory is leased. A total 2.95 million sf is currently available. Net absorption for all of 2000 among properties 50,000 sf or greater was 1.45 million sf.