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Commercial Real Estate
Business Observer Thursday, Aug. 19, 2021 1 month ago

Retail developers find ways to beat back e-commerce

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Several large landlord and developers aren't ready to give up on the traditional shopping plaza.
by: Louis Llovio and Mark Gordon

The traditional shopping center isn’t dead. Not yet at least. 

Proof comes in several examples in the region. There’s the Mabry Marketplace in Tampa, Jacaranda Plaza in Venice and Addison Place in Naples, to name three. Plans at Addison Place, from national real estate investment and development company WMG Development, include a new Chick-fil-A, Aldi grocery store and Heartland Dental office. These centers and others are also proof of how much landlords are trying to be flexible to respond the right way to a rapidly-changing marketplace. 

“With all these new delivery services out there, (retailers and restaurant owners) are trying to see where the real gaps are and then figure out how to best plug them,” says Charlie Alloway, a senior associate at LandQuest Commercial Real Estate in Tampa. “That’s not a very specific answer, but I think it’s true that all of retail has had to sort of step back two or three paces and go, ‘Wow. What has this done to us, and what’s it likely to continue to do to us, and how do we change what’s going on so we can be as profitable as possible.”

Fill the need

'Population growth begets the need for more and better services.There was a need that needed to be filled.' Mark Chait, Benderson Development

East Manatee County-based Benderson Development sought to fills some retail gaps at a shopping center in Venice, and in doing so it totally transformed the center, Jacaranda Plaza. On U.S. 41, just south of Center Road, for many years Jacaranda was known more for what it used to be. That includes a Kmart that sat empty for at least 10 years, and what was once a Blockbuster Video store. 

The former Kmart, which was 84,000 square feet, is now home to a variety of brands, including a 20,000-square-foot Marshalls; a 31,200-square-foot Burlington; and a 29,250-square-foot Aldi. Jacaranda Plaza is now about 90% leased, says Mark Chait, executive director of leasing with east Manatee County-based Benderson, one of the largest retail landlords in the country. 

Courtesy. Benderson Development has reimagined Jacaranda Plaza in Venice.

Chait cites a commercial real estate truism in the center’s resurgence: demand for retail follows housing growth. “Population growth begets the need for more and better services,” Chait says. “There was a need that needed to be filled.” 

Like Benderson and other retail landlords have done, the strategy to fill that need has also become a puzzle of finding tenants that are experienced-based retail — the anti-Amazon. That’s why the mix of tenants at Jacaranda include First Watch, Bonefish Grill, Petco, Jersey Mike's Subs, Body by Barre and Noire the Nail Bar. Petco is the only one on that list where e-commerce is a competitor. 

The renovations have led to another group, of six newer tenants coming soon. In the new 12,900-square-foot outparcel building across from Aldi, plans call for a Crisp and Green, a fast-casual, healthy restaurant from Minnesota that will have a 2,770-square-foot end-cap space with a drive-thru; The Joint Chiropractic; an AT&T store; and a Tropical Smoothie Café. The new outparcel building next to Bonefish Grill will be home to an Eyeglass World, T-Mobile and Kendo Asian Cuisine a sushi and hibachi restaurant.

Benderson acquired the north side of the property in 2007 for $5.5 million, Sarasota County property records show. That’s where the recent improvements started, including a facade renovation to existing store fronts, construction of the Bonefish and the addition of a 10,500-square-foot outparcel now home to First Watch, Urban Taco and Xfinity. 

Courtesy. Jacaranda Plaza in Venice, which was once home to a K-Mart and a Blockbuster Video.

Benderson acquired the vacant Kmart in 2016 and kicked off the major renovation of the southern section of the plaza in 2018. That started with stripping the building to its shell. Other work included adding an extension, renovating and reconfiguring the parking lot, upgrading the lighting, new pavers, landscaping and constructing about 20,000 square feet of new outparcel space.

Benderson was founded in 1949 in Buffalo and now has a portfolio of more than 800 properties totaling over 45 million square feet in 40 states. Officials decline to disclose how much the firm invested overall into Jacaranda Plaza. “Florida is a big growth state,” says Chait, “and people will need more retail.” 

More options

Mabry Marketplace is still in its infancy but the 18-acre development is already drawing attention from residents and potential tenants.

Construction on the property — on the corner of Himes and Waters Avenues and connected to N. Dale Mabry Highway— began in the spring and crews have razed the majority of the property, which includes a small lake. Alloway, with LandQuest, says the development’s location has spurred a lot of interest from potential tenants and there are several deals in the works, including one for a national gym chain and grocery store.

Citing confidentiality of negotiations, he declines to disclose the names of the potential tenants. But a site map included in the lease brochure, available online, shows Aldi as a proposed tenant with a store facing Waters.

For residents living nearby, a grocery store opening so close would be a huge improvement to their current situation. There's a Walmart with a grocery store on Dale Mabry, just south of Waters, but to reach it, shoppers have to cross the often-congested and regularly perilous road. Otherwise, the nearest grocery store is, for most people living in the area, several heavily trafficked miles away.

An Aldi — or whatever came in — would be the only local full-service grocery store that could be considered nearby.

In addition to the grocery store, Mabry Marketplace will include a fast food restaurant on the small portion of the property that sits on Dale Mabry, Alloway says. That parcel, which for years was a Steak and Ale Restaurant before closing and then housed an insurance company, will connect to the main center and Himes Avenue and give it an entrance off the main highway.

More importantly, it gives Mabry Marketplace a Dale Mabry address and, cynics will say, the ability to charge higher rents that address commands.

For now, the only officially announced tenant at Mabry Place is a Circle K gas station on the corner of Himes and Waters.

Brown to Beauty 

COURTESY: Mabry Marketplace is going onto the site of a former Honeywell site that left the property contaminated — and unsellable — for years.

With all the new retail activity Mabry Marketplace will bring to an already crowded area, its arrival is not only being welcomed by those who charge by the square foot or who’ll drive shorter distances for groceries.

The new center is brightening up a corner of the county long been left abandoned and wallowing in uncertainty. The site is the former home of a Honeywell plant that for years contaminated the soil and the lake on the property. It was eventually designated a brownfield site as the contamination left the property unsellable.

WMG Development, the developer building the center — which is also behind Addison Place in Naples — says in a May press release that “after rigorous analysis and support from local officials, WMG embraced the challenge and will implement the goal of the Florida Brownfields Redevelopment Act to reuse a former industrial site as a source of employment and economic productivity for the area.”

The brownfields act was created to “reduce public health and environmental hazards on existing commercial and industrial sites that are abandoned or underused due to these hazards.”

According to the county appraiser’s office, WMG acquired the property through a quit claim deed Dec. 31, 2020.

Harry Cohen, who represents District 1 on the Hillsborough County Commission, says the development will replace the eyesore the abandoned lot was and creates a space residents can appreciate, with greenery, amenities and choices. “I think it sort of speaks for itself,” he says. “You take something blighted and you turn it into something beautiful and useful.”

 

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