Retailers Statewide Plan To Expand Add Jobs
Written by Samantha Joseph on January 29, 2004
By Samantha Joseph
State retailers expect more business this year and several plan to increase staff or open branches, according to the Florida Retail Federation.
"In general, Florida’s market is pretty resilient," said Rick McAllister, president of the Tallahassee-based trade association. "While the rest of the nation expects some difficult times, Florida does not."
The association’s 9,000 member companies include Payless Shoe Source, Auto Zone, Burdines, Publix Super Markets Inc., Office Depot, Wal-Mart Stores Inc. and Target Corp.
More than 70% of Florida retailers expect improved business conditions in the first half of this year, 33% plan new hires and 18% expect to add branches, the federation said.
Statewide, 913,000 people work in department stores, car dealerships, supermarkets and other merchandise stores and consumer spending accounts for about 75% of the state’s gross domestic product, according to the federation.
The property-sales boom in Miami has boosted the county’s retail industry, commercial real estate company CB Richard Ellis reported in a market index brief.
"One promising sign is Miami-Dade’s population growth," the report said. "This makes the area’s existing shopping centers very attractive retail investment properties."
While the terrorist attacks of Sept. 11, 2001, and the war in Iraq undermined consumer confidence and weakened the US economy, positive factors such as favorable borrowing rates have boosted Florida retail, the group said. Low interest rates have encouraged mortgage refinancing, which has added disposable income to the economy. Attractive rates also have strengthened the construction industry, creating jobs and spending money for workers in residential and commercial building, Mr. McAllister said.
"As long as this continues, it will add to the good economic outlook for 2004," he said. "Without any major negative event, I think this will be a good year for all of Florida and Miami-Dade County as well."
Robert Geitner – project manager at Downtown Miami Partnership Inc., a local economic development group – estimated that about 7,000 will in the city’s core area within five years, compared to 500 to 1,000 currently. The group uses data from residential building permits to predict population growth.
CB Richard Ellis’ report said three major projects in the county – Downtown Dadeland, Mary Brickell Village and Bed, Bath & Beyond Center – accounted for 383,994 square feet of retail space under construction at the end of last year. It said 30% has been leased.
The report also said the county’s vacancy rate for retail space was 5.98% at the end of last year, compared to 5.27% at midyear – a marginal change, according to marketing coordinator Calum Weaver.
The average annual rate in the county for triple net leases – agreements in which the tenant assumes responsibility for all operating costs – fell to $18.20 per square foot in December from $18.92 in June. Space in Coral Gables and South Miami was the highest, $30.49. The rate was $27.50 in Miami Beach and $26.34 downtown.
Paco Diaz, senior vice president of retail properties at CB Richard Ellis, predicted that lease rates will rise and vacancy rates will fall over the next four years. He said that at 25 square feet of retail space per resident, the county’s retail market is underdeveloped. The national average is 126 square feet per resident, he said.
Along with 25,000 condo units planned or being built between Miami River and Northwest 36th Street in the next five years, retail space will be added in several high-rise, mixed-used projects.
Mr. Diaz said he expects significant improvement in the southern end of the county, around Cutler Ridge and Homestead.
"We’re running out of land in the rest of the county," he said, "plus there’s tremendous new residential activity planned and on the way down there."