Retail

1
CBRE Global Research and Consulting
© 2014, CBRE, Inc.
State of Florida Retail
MarketView
TOURISM AND INVESTMENT SPENDING LEAD FLORIDA’S
ECONOMIC RECOVERY
Hot Topics

 For 2013, Florida ranked 18
th
in
the nation in terms of year-over-
year growth in Gross Domestic
Product (GDP), with real growth
of 2.2%. Florida moved above
the slowing national average of
1.8% published July 2014 by the
Office of Economic and
Demographic Research.
 Florida’s population is on track
to break the 20 million mark
prior to April 1, 2016, surpassing
New York as the third most
populous state.
 Area Development magazine
awarded Florida the Silver
Shovel Award for job creation
and economic impact success for
the second year in a row.
 Tax Foundation ranked Florida
No. 5 on the list of the best
states for startups because of its
lack of a state income tax and
low unemployment-insurance
taxes.
 According to the Florida Retail
Federation, back-to-school
spending is projected to reach
about $5 billion in 2014, up
about 5% from 2013.
 Amazon started collecting sales
tax in Florida on May 1st.
Shopping patterns may shift as
consumers factor the additional
cost into their purchasing
decisions.
Q2 2014
Figure 1: Total Vacancy -vs- Avg Direct Asking Lease Rate (NNN)
Source: CBRE Research, Q2 2014.
*Arrows indicate change from previous year.
DIRECT VACANCY
7.0%
UNEMPLOYMENT
6.1%
NET ABSORPTION
840 K sq. ft.
CONSTRUCTION
2.5 Million sq. ft.
Economic Influence
Florida’s economy is leading the
nation in job growth and overall
recovery in 2014. The state is
projected to outpace the nation for the
next several years. Florida’s annual
job growth rate has exceeded the
nation’s rate since April 2012. As of
May 2014, Florida added 218,800
jobs year over year, which equates to
a 2.9% increase, on a non-seasonally
adjusted basis.
Florida’s unemployment rate fell to
6.1% from 7.3% year over year. By
comparison, nationally,
unemployment stands at 6.1%
compared to the previous year’s rate
of 7.3%. Florida’s unemployment rate
has been equal to or below the
national rate for 13 consecutive
months. Retail services, which is
composed of retail trade, leisure and
hospitality, gained the most jobs,
adding 74,900 jobs or 3.7% year over
year. These industry job gains were
due to increases in grocery stores,
beverage stores, restaurants and
drinking establishments.
The positive job growth is just one
component of the economic recovery
and strength attributed to the state.
According to Washington Economics
Group, Florida tourism and recreation
spending increased 6.4% in Q1 2014
year over year. Investment spending,
or purchases of building materials
and business supplies, hit $7.2 billion
in March 2014, a 7.4% increase from
the same time last year. This increase
in spending is leading Florida’s
recovery.
Another recovery indicator was
reported by the University of Florida’s
Consumer Sentiment Index (CSI). The
CSI rose in June by four points to 82,
a post-recession high. CSI indicators
that impact the increase include
expectations of personal finances,
U.S. economic conditions, and
whether it is a good time to buy big-
ticket items, such as a car or
appliances.
$15.00
$16.00
$17.00
$18.00
$19.00
$20.00
0%
2%
4%
6%
8%
10%
2009 2010 2011 2012 2013 2014 YTD
ASKING RATE
$18.56
COMPLETIONS
219 K sq. ft.

Percent
Vacancy
Asking
Lease Rate
Total Vacancy

7.4%
Average Direct Asking Lease Rate

$18.56
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© 2014, CBRE, Inc.
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Figure 2: Market Statistics
Housing prices and sales have been holding up, with the
median price of a single-family home in Florida increasing
4.3% year over year to $180,000. The stock market
continues to make gains and hit new highs despite
consistent tapering by the Federal Reserve in its bond-
buying program known as Quantitative Easing III.
Leasing Activity
Florida’s retail markets have slowly recovered. Total
vacancy stood at 7.4%, decreasing 10 basis points (bps)
from Q1 2014 and 60 bps from Q2 2013’s 8.0% rate.
South Florida vacancy in Q2 2014 was 6.5%, with the
Miami market posting the lowest vacancy rate of 3.9%.
North Florida had a total vacancy rate of 8.1%, with the
Orlando market posting the lowest rate of 7.2%. The year-
over-year vacancy comparisons show a 40 bps decrease
for South Florida and a 70 bps decrease for North
Florida. The Jacksonville market had the largest year-
over-year decrease, dropping 90 bps to 9.6% from 10.5%
in Q2 2013.
The average lease rate for Florida was $18.56 per sq. ft.
In South Florida, the average lease rate in Q2 2014 was
$24.29 per sq. ft., an increase of $1.49 year over year.
The year-over-year growth equates to a 6.5% gain,
reflecting an increase in demand for prime retail assets in
the South Florida markets, especially Miami. The average
lease rate for North Florida in Q2 2014 was $14.23 per
sq. ft., a $0.34 decrease year over year, or 2.3%.
Leasing activity in Q2 2014 was strong, with five of the six
markets posting positive net absorption, and statewide net
absorption totaling 840,407 sq. ft. Year-to-date
absorption continues to be positive for the state, with
1,304,180 sq. ft. posted. South Florida accounted for
417,054 sq. ft. and North Florida markets posted
887,126 sq. ft. of positive net absorption. All three North
Florida markets posted positive year-to-date absorption
above 200,000 sq. ft.
Source: CBRE Research, Q2 2014.
Submarket Building sq. ft.
Direct Vacancy
(%)
Total Vacancy
(%)
Occupancy
(%)
Q2 2014 Net
Absorption
2014 Net
Absorption
Under
Construction
Avg Dir Asking Lse
Rate (NNN)
Miami 42,010,015 3.8 3.9 96.1 82,021 148,713 1,857,984 $40.35
Broward 47,948,815 7.7 7.8 92.2 259,579 301,692 72,000 $20.82
Palm Beach 43,852,469 7.6 7.7 92.3 (800) (33,351) 246,468 $18.14
Tampa Bay 67,283,648 6.8 8.0 92.0 194,512 343,624 0 $14.35
Orlando 63,029,021 7.1 7.2 92.8 216,069 340,048 121,832 $13.95
Jacksonville 37,725,137 9.3 9.6 90.4 89,026 203,454 235,645 $14.47
Total State of Florida 301,849,105 7.0 7.4 92.6 840,407 1,304,180 2,533,929 $18.56
Total South Florida 133,811,299 6.5 6.5 93.5 340,800 417,054 2,176,452 $24.29
Total North Florida 168,037,806 7.5 8.1 91.9 499,607 887,126 357,477 $14.23
Figure 3: Avg Dir Asking Lease Rates (NNN)
Source: CBRE Research, Q2 2014.
$15
$16
$17
$18
$19
$20
2009 2010 2011 2012 2013 2014 YTD
Figure 4: Net Absorption
(5,000)
(4,000)
(3,000)
(2,000)
(1,000)
0
1,000
2,000
3,000
2009 2010 2011 2012 2013 2014 YTD
000’s of sq. ft.
Source: CBRE Research, Q2 2014.
YTD $18.56
YTD 1.3 Million sq. ft.

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© 2014, CBRE, Inc.
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Development
At the close of Q2 2014, there was 2,533,929 sq. ft. of retail
space under construction in Florida. Approximately 73% of
this new product resides in the Miami market. A significant
large-scale project underway in Miami is Brickell City Centre,
a 5.4-million-sq.-ft., mixed-use project that will feature
565,000 sq. ft. of retail space.
Retail deliveries for the first half of the year occurred in three
markets with Tampa Bay, Orlando and Broward leading the
way. Tampa Bay delivered 147,850 sq. ft., Orlando had
100,218 sq. ft. and Broward with 70,650 sq. ft. The retail
construction pipeline is likely to grow throughout the state
with planned projects commencing in the second half of
2014.
Mass transportation has made gains in Florida, particularly in
Central Florida, with the arrival of SunRail, the region’s first
commuter train on May 1, 2014. SunRail’s primary purpose
is to be an alternative to driving on Interstate-4. It is being
built in two phases. Phase 1 opened with a two-week free
trial period, during which 10,000 passengers rode the line.
Daily ridership is expected to average about 4,300
passengers by the end of the first operating year. SunRail
Phase 2 is expected to be fully completed sometime in 2017.
SunRail will eventually connect to the All Aboard Florida rail
line with service to Miami.
Sales Activity
In Q2 2014, 3.3 million sq. ft. of retail space changed hands
in 39 transactions and was valued at more than $442
million. Transactions increased in Q2 2014 compared to Q1
2014, which garnered 2.3 million sq. ft. in 37 transactions
with a value of $437 million. Year-to-date activity amounts to
5.5 million sq. ft., 76 transactions and $879 million changing
hands.
Trading of Class A retail assets has been brisk for the last two
years and inventory for sale has dwindled. Buyers are shifting
to Class B and Class C properties because of the value add
opportunity they present. They are trading at a greater
frequency as sellers are motivated to unload while the market
is active. New developments in prime, densely populated
areas are on the rise, fueled by consumer demand and
tourism. According to market professionals, interest rates are
decreasing for quality Class B or better community and
power centers. They forecast cap rates will remain flat in the
second half of 2014, with interest and borrowing rates
having the most impact.
Outlook
Tourism spending and investment spending have helped
Florida’s economy recover. The moderate growth is a shift
from the boom and bust period in employment and
productivity that characterized the last ten years.
Florida retail markets have improved, with high-quality assets
trading at a premium and scarcity of quality product driving
new construction. With the creation of a regional rail system,
new retail corridors will be created and old corridors will be
enhanced.
Figure 5: Under Construction and Completions
Source: CBRE Research, Q2 2014.
000’s of sq. ft.
Figure 6: Sales Volume
$0
$2
$4
$6
2009 2010 2011 2012 2013 2014 YTD
Billions of $
2014 YTD # Deals Total sq. ft. Volume $ Per sq. ft.
Miami 8 387,323 $97,700,000 $252
Broward 21 1,487,778 $235,380,000 $158
Palm Beach 7 830,256 $232,448,925 $280
Tampa Bay 20 1,253,413 $122,046,583 $97
Orlando 10 811,258 $127,898,282 $158
Jacksonville 10 746,405 $63,525,000 $85
State of Florida 76 5,516,433 $878,998,790 $159
Figure 7: Sales Volume by Market
Source: CBRE Research, Q2 2014. Real Capital Analytics, Q2 2014.
Source: CBRE Research, Q2 2014. Real Capital Analytics, Q2 2014.
YTD $879 Million
Under Construction 2.5 Million sq. ft.
YTD Completions 319 K sq. ft.
0
1,000
2,000
3,000
4,000
5,000
2009 2010 2011 2012 2013 2014 YTD
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© 2014, CBRE, Inc.
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Figure 8: Under Construction as of 06/30/2014
Market Property/Address Submarket Building sq. ft. Average Asking Rate
Miami Brickell City Centre/700-701 S Miami Ave, Miami Coral Gables/S Miami 565,000 Negotiable
Miami IKEA/ NW 117th Ave, Miami Doral/Medley 417,000 Negotiable
Miami Fontainbleau Park Plaza/9271 W Flagler St, Miami West Miami 234,491 Negotiable
Miami Fontainebleau Square/9801 W Flagler St, Miami West Miami 179,593 Negotiable
Jacksonville Nordstrom/Town Center Blvd, Jacksonville Southside 158,000 Negotiable
Miami Design District/140 NE 39 St, Miami Miami Shores 150,000 Negotiable
Palm Beach Delray Place/E Linton Blvd, Delray Beach Delray Beach 130,000 Negotiable
Orlando Gateway Crossing/831 S SR 434, Altamonte Springs Seminole Co 70,775 Negotiable
Miami Royal Palm Garden Plaza/W 80th St, Hialeah Gardens Hialeah 70,000 Negotiable
Broward Deer Creek Commons/3599 W Hillsboro Blvd, Deerfield Beach NE Broward 62,000 Negotiable
Palm Beach Village Green Center/2773 State Rd 7, Wellington Wellington/Royal Palm 61,500 Negotiable
Palm Beach Delray Village Shoppes/Linton Blvd, Delray Beach Delray Beach 54,968 $22-37.00
Miami Walmart Neighborhood Market/6991 SW 8th St, Miami Coral Gables/S Miami 54,000 Negotiable
Miami Palmetto Gardens Plaza/3711 NW 167th St, Miami Gardens Carol City/Opa Locka 53,000 Negotiable
Orlando Undisclosed/8387 International Dr, Orlando Southwest Orange Co 51,507 Negotiable
Miami Shoppes at Civica/1050 NW 14th St, Miami Central Miami 50,000 Negotiable
Jacksonville Shoppes on Riverside/150 Riverside Ave, Jacksonville Westside 49,870 Negotiable
Miami West Kendall Village West Kendall 47,900 Negotiable
Source: Florida Department of Economic Opportunity, May 2014.
Figure 10: Labor Market Statistics
Source: Florida Department of Economic Opportunity, May 2014.
Figure 11: Florida Jobs by Sector
Trade,
Transportation,
and Utilities
20%
Professional and
Business
Services
15%
Education and
Health Services
15%
Total
Government
14%
Leisure and
Hospitality
14%
Financial
Activities
7%
Construction
5%
Manufacturing
4%
Other Services
4%
Information
2%
Source: CBRE Research, Q2 2014.
Figure 9: Delivered Q2 2014
Source: CBRE Research, Q2 2014.
Market Property/Address Submarket Building sq. ft. Average Asking Rate
Tampa Bay Walmart/15100 N Nebraska Ave, Tampa Hillsborough 147,850 Negotiable
Broward West Lake Commons/1700 Sheridan St, Hollywood SE Broward 70,650 Negotiable
MSA/County Labor Force Employment Unemployment Unemploy%
Miami-Dade 1,282,788 1,185,038 97,750 7.6
Broward 1,069,429 1,013,944 55,485 5.2
Palm Beach 663,162 623,981 39,181 5.9
Tampa Bay MSA 1,361,546 1,277,469 84,077 6.2
Orlando MSA 1,197,233 1,129,305 67,928 5.7
Jacksonville MSA 726,372 683,998 42,374 5.8
Florida 9,632,000 9,043,000 589,000 6.1
United States 155,841,000 146,398,000 9,443,000 6.1
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© 2014, CBRE, Inc.
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Figure 12: Q2 2014 Sales
Figure 13: Q2 2014 Leases
Source: CBRE Research, Q2 2014.
Source: CBRE Research, Q2 2014. Real Capital Analytics, Q2 2014.
Market Property/Address Submarket Tenant Transaction sq. ft.
Orlando Park Promenade/2704 Hiawassee Rd, Orlando Northwest Orange Co Roses 58,030
Tampa Bay Colony Crossings/10005 Hillsborough Ave, Tampa Southeast Hillsborough Gaming Business 42,112
Orlando Highland Lakes Ctr/7305 Colonial Dr, Orlando Northwest Orange Co Falls Discount Stores 41,980
Miami Biscayne Retail Center/19915 Biscayne Blvd, Aventura Aventura Stein Mart 36,000
Palm Beach Shoppes at City Centre/11201 US Hwy 1, North Palm Beach North Palm Beach Doris Italian Market 22,258
Jacksonville Riverplace Shopping Center/11111 San Jose Blvd, Jacksonville Mandarin World Market 21,750
Tampa Bay Terrace Walk Plaza/5611 Fowler Ave, Tampa Northeast Hillsborough Planet Fitness 21,500
Tampa Bay Carolyn Lane Shopping Center/11613 Nebraska Ave, Tampa Northeast Hillsborough Kingdom Worship 20,800
Miami Lincoln Road Mall/400 Lincoln Rd, Miami Beach Miami Beach Gap, Inc. 19,000
Jacksonville Gateway Town Center/5184 Norwood Ave, Jacksonville Northside YouFit Health Clubs 17,676
Orlando Forest Edge Plaza/5701 Edgewater Dr, Orlando Northeast Orange Co Roses 15,000
Miami 1001-1021 Lincoln Rd (Apple)/1001 Lincoln Road, Miami Beach Miami Beach Apple Store 13,827
Jacksonville Roosevelt Square/4495 Roosevelt Blvd, Jacksonville Westside Party City 13,200
Miami RK Causeway Plaza/12255 Biscayne Blvd, Miami North Miami TJ Maxx 11,000
Tampa Bay Waters Hanley Plaza/7501 Waters Ave, Tampa Northwest Hillsborough Undisclosed 10,800
Broward St. Mina's Plaza/2623 St Rd 7, Lauderhill Cntrl East Broward
South Florida Urgent Care &
Orthopedic
10,162
Jacksonville Avenues North Retail Center/9357 Philips Hwy, Jacksonville Baymeadows/Avenues Kalyaan Market 8,042
Tampa Bay Sabala Plaza/14100 Walsingham Rd, Largo Mid Pinellas Get Fitness 7,460
Jacksonville Avenues North Retail Center/9357 Philips Hwy, Jacksonville Baymeadows/Avenues Uniforms of Central FL 7,190
Broward Embassy Lakes Shopping Center/2503 Sheridan St, Cooper City SW Broward True Value 7,000
Market Property/Address Buyer Building sq. ft. Sales Price
Palm Beach Cross Country Plaza/4346-4370 Okeechobee Blvd Cross Country Owner LLC 351,337 $35,000,000
Broward Westfork Plaza/15801 Pines Blvd DRA Advisors 251,783 $44,850,000
Jacksonville fmr Super Target/1919 Wells Rd Garden Ridge 174,639 $5,600,000
Tampa Bay Sun Point/3022-3074 College Ave E Saglo Development Corporation 132,374 $7,250,000
Broward University Marketplace/8030-8384 N Pines Blvd RXR Capital Holdings 125,704 $12,500,000
Palm Beach Delray Square/4755-4973 W Atlantic Ave TKC CLXXVIII 115,538 $7,665,000
Tampa Bay Shoppes of Apollo Beach/6402 N Us Hwy 41 Publix Supermarkets Inc 111,606 $12,800,000
Jacksonville Home Depot/1919 Wells Rd Normandy Properties, LLC 108,578 $9,650,000
Orlando Boulevard Plaza/300 W Lake Mary Blvd Branch Properties 105,380 $11,540,000
Broward Riverside Square/8100-8268 Wiles Rd Global Fund Investments, Inc. 104,241 $12,380,000
Orlando Lake Mary Village/3899 Lake Mary Blvd W Crow Holdings 100,088 $27,000,000
Broward Paraiso Parc/15701-15729 Pines Blvd DRA Advisors 88,850 $40,500,000
Miami Multi-Property Sale/41-65 E Flagler St TIR Prime Properties 84,821 $11,500,000
Tampa Bay Bloomingdale Plaza/121 E Bloomingdale Ave Slate Properties Inc 83,192 $8,800,000
Tampa Bay River Bay Shopping Center/9802 US Hwy 301 S Mountain View Capital 78,000 $5,775,000
Broward Park View Square/17101 Miramar Pkwy PE | ARC Shopping Center REIT 75,000 $14,500,000
Jacksonville St Johns Plaza/2220 County Rd 210 W PE | ARC Shopping Center REIT 71,370 $13,000,000
Tampa Bay Anclote Corner Shopping Center/1919-1965 N Pinellas Ave 1919 North Pinellas Ave LLC 70,000 $2,300,000
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CONTACTS
For more information about this State MarketView, please contact:
+ 60 million sq. ft.
45 – 60 million sq. ft.
Below 45 million sq. ft.
Inventory Size
Tampa Bay
Inventory Vacancy % Asking Rate
67,283,648 8.0% $14.35 NNN
Miami
Inventory Vacancy % Asking Rate
42,010,015 3.9% $40.35 NNN
Broward
Inventory Vacancy % Asking Rate
47,948,815 7.8% $20.82 NNN
Palm Beach
Inventory Vacancy % Asking Rate
43,852,469 7.7% $18.14 NNN
Orlando
Inventory Vacancy % Asking Rate
63,029,021 7.2% $13.95 NNN
Jacksonville
Inventory Vacancy % Asking Rate
37,725,137 9.6% $14.47 NNN
Shanna Drwiega
Research Analyst
CBRE
101 East Kennedy
Boulevard, Suite 1500
Tampa, FL 33602
t: +1 813 273 8433
e: [email protected]
Quinn Eddins
Director, Research and Analysis
CBRE
777 Brickell Avenue
Suite 900
Miami, FL 33131
t: +1 305 428 6325
e: [email protected]
Abu I. Mansoor
Senior Research Analyst
CBRE
200 East Las Olas
Boulevard, Suite 1620
Fort Lauderdale, FL 33301
t: +1 954 331 1733
e: [email protected]
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