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Nearly two years after Sweetbay Supermarkets closed statewide, area commercial real estate brokerage firms are working through the slog to lease them to new tenants.
Progress has been slow, but steady, as former Sweetbay stores have been absorbed by grocers such as Walmart and converted to non-traditional retail uses. In one instance, an antique car dealer opened a showroom in Charlotte County where Sweetbay had previously sold produce, meats and other goods.
Of the 40 Sweetbay stores that were shuttered in Florida, roughly half remain uncommitted, including centers in Plant City, Tampa, Largo, Sarasota and Punta Gorda, according to a list from research firm CoStar.
“The size of the boxes we're dealing with is not in vogue with many retailers or grocers today,” says Andrew Couch, managing director of DJM Real Estate, a New York-based retail specialist that has been marketing the former supermarkets together with regional brokerages.
“Most grocers today want about 20,000 square feet, and the smallest store Sweetbay had was 31,000 square feet,” Couch added. “The largest measures 55,000 square feet. That's been our biggest challenge.”
Tampa-based Sweetbay began closing dozens of underperforming stores in 2013 amid a biforcation of consumer grocery tastes in the aftermath of the economic recession of the past decade.
That same year, Jacksonville-based Bi-Lo Holdings agreed to buy 83 Sweetbay stores in a $265 million deal. Following the purchase, Bi-Lo announced plans to convert many of the stores to its Winn-Dixie brand and “retire” the Sweetbay name.
Complicating the re-leasing process, many of the Sweetbay stores were in tertiary locations and shopping centers without high-traffic counts and Class B co-tenants.
At the same time, growing grocery chains like Walmart Neighborhood Markets, Whole Foods Market, Aldi and others have preferred to open standalone stores rather than locate in established centers in some cases.
And in a few cases, shopping center landlords with Sweetbay leases have exercised their right to reject new tenants because some deals have as much as a decade remaining until they expire, while some merchants have balked at asking rental rates for the former stores.
Former Sweetbay landlords ranging from Gator Investments, which owns the Town & Country Plaza in Sarasota, to Bonita Bay Group, which controls a Lee County strip center once occupied by Sweetbay, did not return telephone calls or emails for comment.
Still, DJM's willingness to subdivide the spaces and former Sweetbay parent Delhaize Group's multimillion investment in the former Kash N' Karry stores beginning in 2004 has attracted grocers and other merchants alike.
“The market has changed so dramatically in the past couple of years,” says Karen Crowther, a principal with Colliers International Southwest Florida and the brokerage firm's director of retail services, who is marketing a Fort Myers Sweetbay for re-lease.
“Things have improved so quickly that various retailers have come back into the market looking to accommodate inventories or showrooms,” she added.
Those users — and potential tenants for the Sweetbay stores — include furniture sellers, Goodwill thrift stores, call center operators, ethnic grocers and fitness centers. LA Fitness, for instance, has taken down a Sarasota Sweetbay and may be looking at others. In a few cases, shopping center owners have reabsorbed the supermarket spots, Couch says.
“Each one of these stores has a different story,” he added.
- K.L. McQuaid
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