What this means is that retail vacancy remains high, at 10.3%, but has stabilized over the past three quarters and construction activity is minimal. Meanwhile, retailers which are expanding include convenience stores and discounters, such as 7-Eleven, which plans to open or convert about 45 stores by 2012. The Dollar Store segment plans to open about 1500 stores nationwide during 2010.

There are a number of new phenomena in retailing today in Central Florida and elsewhere. Landlords are experimenting with "pop-up" stores, which occupy small spaces for short periods, while Walgreens and Target are significantly expanding into the grocery segment.

The unemployment picture does not help Central Florida retailers. The unemployment rate for the Orlando-Kissimmee MSA was 12.5% in February 2010, compared to 9.2% in February 2009. The state of Florida's unemployment rate was 12.2% in February 2010 compared to 9.3% in February 2009.

Net absorption for the first quarter of 2010 turned slightly negative for the overall Central Florida market, after positive absorption in the fourth quarter. Five submarkets had positive absorption, while seven continued to have declining demand for space.

Construction activity remained unchanged from fourth quarter 2009 with a total of 117,449 square feet. Not surprising, given the current state of the economy and of retail, much of the construction activity involves renovations of outdated centers or conversions of vacated space.

While the demand for retail space is relatively low, some medical users are taking vacant retail space. Landlords like these tenants, because they pay higher rents and are more stable than conventional retail tenants, according to the Colliers report. Although it can be expensive to convert big box space for medical tenants, few big box retailers are expanding today, which means that the benefits usually outweigh the cost.