(Carl Cronan is editor of Real EstateFlorida.)
KISSIMMEE, FL-Retail brokers' reaction to current market conditions largely depends on their age perspective, according to one development sage who spoke at the International Council of Shopping Centers' 2008 Florida conference this week. Craig Sher, executive chairman of the St. Petersburg-based Sembler Co., says those who have been through prior cycles are less likely to panic lately.
"The under-40 crowd has never seen a down cycle," Sher told GlobeSt.com after a session addressing rapidly changing markets. He pointed out that during the last one, in the late 1980s, professionals who are now in their 30s were either attending or preparing for college.
Just how bad things are right now could also be a matter of perspective, considering Florida's retail occupancy rate has remained in the 90% range for many years. Experts observe that the most glaring difference now is the rate of bank failures, particularly among those that got caught up in the subprime mortgage mess, with more such trouble on the horizon.
"I've been through four of these cycles, but none as bad as this," Stanley Tate, president of Tate Enterprises in North Miami Beach, told several hundred ICSC members during the session, one of many held Monday morning at the Gaylord Palms Resort & Convention Center in Kissimmee. Tate, who chaired the Resolution Trust Corp. during the nation's previous spate of bank failures in the early 1990s, also noted that banks that can withstand the current fallout should be in a stronger position for the next recovery.
Many ICSC members, as well as developers with project display booths at the conference expo, believe Florida's recovery won't happen until sometime in 2010. Yet they remain confident that the state can continue its tradition of rebounding more quickly than others.
"I think that what goes up comes down, and hopefully what goes down comes up. You have to be able to recognize the timing of that," says Sher, who moved into his current semi-retired role last year. "Those of us who are a little more seasoned are a little better prepared for it."
BULLISH ON FLORIDA: Many retail developers from across the US still have their sights set on the Sunshine State, including Houston-based Weingarten Realty. However, they point to the state's perceived luxury condominium glut as a weak spot in the state's economy.
"We're huge fans of Florida," said Robert Smith, Weingarten senior vice president and director of new development, during the conference's opening general session. He estimates approximately 14 million sf of neighborhood and community shopping centers are being built statewide, but he warns that those projects are at a "yellow light" in an intersection and need to be leased up before the light turns red.
"There is no way that retailers and developers can abandon the state of Florida," Smith said. "We really believe in the underlying fundamentals of Florida and expect them to strengthen."
NEW TENANTS COMING SOON: A wide range of retailers and restaurants are looking to expand within Florida in spite of the current economy, ranging from homegrown businesses to nationally recognized brands. Betsy Trobaugh, director of the University of Florida's Miller Center for Retail Education & Research, identifies Target, Kohl's, J Crew, Anthropologie and Urban Outfitters among those seeking space at centers around the state.
Another list of "hot retailers" released during the ICSC conference names Hurricane Grill & Wings, a Lake Worth-based chain looking to at least double its number of 30 Florida stores through next year, as well as Put a Cork in It, a Winter Garden-based wine store that plans up to 16 additional locations by the end of 2009. Others are Five Guys Burgers and Fries, Rue 21, Ulta Beauty, and Jo-Ann Fabric and Craft Stores.
Trobaugh noted that H&M, a retailer specializing in "disposable chic" fashions, looks to make its first foray into the Florida market. Also, Red Robin Gourmet Burgers had a promotional booth at the ICSC Florida Deal Making Exhibition and seeks to expand beyond its lone statewide location in Fort Myers.
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