Positive signs emerge in Broward Co. retail

FORT LAUDERDALE - Despite a weakening in fundamentals in the first quarter and expectations for additional store closures and declines in tenant demand over the remainder of the year, some positive signs are evident in Broward County, according to a second-quarter Retail Research Report by Marcus & Millichap.

While a recovery in the retail property sector may not start for several more quarters, the slowing in construction will help to set the stage for a rebound in occupancy and rent growth.

“In the investment market, transactions have decreased during the past year, reflecting a lack of liquidity in the credit markets and greater risk aversion among prospective buyers,” says Gregory Matus, regional manager of the Fort Lauderdale office of Marcus & Millichap. “As a growth market, Broward County normally receives considerable attention from single-tenant investors.”

Following are some of the most significant aspects of the Fort Lauderdale Retail Research Report:

- In 2009, 32,000 jobs will be eliminated in Broward County, a decline in total employment of 4.2%. More than 35,000 positions were cut last year.

- Developers will complete 450,000sf of space this year, down from 1.7 msf in 2008. Completions have averaged 1.5 msf annually for the past five years.

- Marketwide, vacancy is forecast to rise 170 basis points to 11.3% in 2009, following a 340-basis-point jump last year.

- Slumping demand will place downward pressure on rents and encourage greater use of concessions. This year, asking rents are expected to fall 4% to $18.46 psf, while effective rents are projected to recede 6.7% to $15.68 psf.

For a copy of the complete Fort Lauderdale Retail Research Report, visit www.MarcusMillichap.com.