Redevelopments are taking over the Tampa Bay area, with several shopping centers either beginning or wrapping up projects this year. From strip centers to malls, all kinds of retail properties are being redeveloped, but the lion's share of activity is focused on non-performing assets located in key corridors.
Several anchor-tenant and big-box chain stores have exited the market, leaving behind spaces that are too big to backfill. Landlords are being forced to reposition their assets as size requirements and anchors have changed. With little new product under construction, redevelopment is a great way for landlords to attract new tenants to their centers. Since less Class A space is available, it's important for Class B and C properties to have great landscaping, signage, facades, etc., in order to attract new tenants. By completing even minor improvements, landlords can increase sales and boost traffic at centers.
Publix is one retailer that has been actively redeveloping a large portion of its stores in Florida. Publix acquired 49 Albertsons stores in Florida in 2008, and has been slowly redeveloping the properties to the Publix layout, making the design more modern and allowing for the added services that exist in many stores today.
Publix also has been renewing its leases at centers the chain is currently located in, closing temporarily to redevelop the stores and reopening within the year. For example, Publix renewed its lease in Dec. 2013 at Indian Rocks Shopping Center, located in Largo. The store closed last month for a 45,000-square-foot redevelopment, and will re-open this fall.
On the heels of the store deciding to renovate, the owner, RMC Property Group, decided to redevelop the entire strip center. The fully leased center will get new facades, signage and an additional 3,000 square feet of new space for lease. This chain of events is not uncommon for Publix-anchored centers, as landlords realize the importance of access and a good layout to retain and attract tenants.
REITs such as Regency Centers and Kimco Realty Corp. have been actively looking for well-located, under-performing assets to redevelop, like Tri-City Plaza, a retail center in Largo that is owned by Kimco. REITs are spending their money on redevelopments to make sure they have profitable centers to hold for the long-term. Tri-City Plaza is undergoing two phases of redevelopment that will include demolition of several buildings and construction of some new ones. The new retail spaces will be larger in order to attract a different kind of tenant.
Westfield Southgate mall in Sarasota, which is owned by Westfield Group, is one redevelopment project that everyone is watching. Westfield announced last May it will revamp the mall to combat a decrease in sales by adding on 46,000 square feet of restaurant and entertainment space, transforming the traditional mall into more of a lifestyle center. The redevelopment will also include landscape and façade upgrades.
Furthermore, when anchor Saks Fifth Avenue leaves the mall in late 2014, an approximately 40,000-square-foot space will remain. While replacement tenants have not been officially announced, the local media has speculated that either a movie theater or an expanded food court could backfill the space.
In 2014, redevelopment will remain the hottest form of construction in the Tampa Bay area as landlords seek to improve sales and tenancy. The area saw record levels of leasing activity in the first quarter, which is expected to continue as newly redeveloped projects come on-line.
— Brian Bern specializes in retail landlord leasing, tenant representation, retail disposition, retail land transactions and helping retail developers identify sites for shopping center development for Franklin Street. Responsible for the launch of the retail leasing division for Franklin Street's Tampa office, Bern oversees all of the office's retail leasing business development for both the Franklin Street Landlord Representation division and the Retail Tenant Services Group.