Investors shift focus to older retail centers

TAMPA - The retail vacancy rate here is expected to rise to the low-10% range this year, generating further declines in rents, according to the 2009 National Retail Research Report by Marcus & Millichap.

“As Tampa and other major markets in Florida proceed into a period of diminished property performance, retailers and investors remain largely upbeat about the metro’s long-term prospects,” says Bryn Merrey, regional manager of the Tampa office of Marcus & Millichap.

“Optimism is supported by the projected addition of more than 20,000 households annually over the next five years and the impact those new residents will have on retail space demand.”

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

- Approximately 42,000 positions will be cut this year, a 3.3% decline. In 2008, 34,700 jobs were eliminated.

- Led by the completion of the 1 msf Cypress Creek Town Center, deliveries will total 1.3 msf in 2009. Last year, 3.6 msf was delivered.

- Vacancy is projected to rise 250 basis points this year to 10.3% as demand declines. Properties in Pinellas County will fare better, with vacancy expected in the mid-9% range.

- Asking rents are forecast to drop 6.1% to $14.41 psf, while effective rents fall 6.6% to $12.79 psf.

Also included in the report is the firm’s annual National Retail Index (NRI), a snapshot analysis that ranks 43 retail markets based on a series of 12-month forward-looking supply and demand indicators. Tampa moves down four places this year to No. 35.