Speaking to delegates at the 2003 Florida Conference of the International Council of Shopping Centers here, Trammell Crow Co. senior vice president C. Whitney Knoll says the completion of the one million-sf Festival Bay shopping center "does not offer much hope that this development will reinvent this submarket, as it is still 50% vacant and shopper traffic is slow."
Knoll expects the International Drive and Kissimmee submarkets to have "increased vacancy in the next 12 months." The 2.92 million-sf I-Drive market is 16.21% vacant, up from 9.77% vacancy at this time last year. The one million-sf Kissimmee tourist hub is 10.29% vacant, up from 1.83% vacancy in May 2002. Average rents are $22.83 per sf on I-Drive; $22.90 in the Kissimmee tourist hub.
Knoll says the city's retail market "has remained sound, despite the war with Iraq and a slow economy." He told delegates "the hottest retail markets in Orlando continue to reflect the residential growth patterns and infrastructure improvements, as well as the ever-changing lifestyles of Orlando residents."
The strongest submarkets are in the east, west and southwest of the metro area. Additionally, "the renaissance of urban living has positioned Downtown as a retail hot spot, with easy lifestyles dictating retail growth," Knoll says. Submarkets with less residential growth and infrastructure improvements such as Rosemont-Pine Hills, Longwood and Sanford "will remain weak."
The addition of the 1.3 million-sf, $450-million Mall at Millenia, developed by a Taubman-Forbes joint venture last October," brought many new names to the local arena, making the face of city retailers more upscale," the Trammell Crow executive says.
However, "the question remains unanswered on how well" the new tenants will perform, he adds. "While the long-term potential seems positive, the mall has already lost a few tenants, as well as its marketing director."
Simon Property Group's 1.6 million-sf Florida Mall, the largest in Central Florida, is adding 11 new specialty stores to its roster, even as Lord & Taylor plans to leave its 141,000-sf premises by year end, Knoll says. The Osceola Square Mall in Kissimmee and the 1.2 million-sf Altamonte Mall in Altamonte Springs plan to redevelop and renovate their site.
But malls such as Fashion Square, Oviedo Marketplace and Seminole Town Center "will struggle to compete with hotter and newer retailers, as well as the surrounding lifestyle centers, if they do not take steps to reinvent themselves," Knoll says.
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