The retail real estate market in Florida, according to a new report from real estate giant JLL, is about as hot as it's ever been.
“Leading markets have continued to see surges in demand from retailers,” states the JLL 2016 Florida Retail Report. “Rent thresholds appear to have been reached, indicating these areas are peaking.”
Sarasota-Bradenton is among five markets statewide JLL labels a “peaking market” in its retail property clock. Fort Myers, Naples and Tampa are among 10 markets the report considers rising. “Every market in Florida saw increases in occupancy in the first half of 2016,” the report adds, “and now occupancy is above 90% in almost every market.”
The report analyzed 14 submarkets across Florida. Here are data from the Gulf Coast markets:
n Tampa/St. Petersburg: The average occupancy rate has increased 14 straight quarters, and is now at 92.3%. Rental asking rents are also on the rise, up 3.5% in 2016, to $14.20 a square foot. On the flip side, a lack of space is becoming an issue. “Some retailers are running into problems with limited availability in popular areas such as Westshore, Hyde Park, downtown St. Petersburg and Clearwater,” the report states. “Much of the existing available inventory is either outdated or in undesirable locations due to changing demographics.”
n Sarasota/Bradenton: The average occupancy rate in the Sarasota-Bradenton market is up, 1.6%, to 92.4%. Asking rental rates rose 2.4% to $17.09. Both rates have increased significantly the last five years. The average occupancy rate was less than 87% in 2011, while asking rental rates hovered between $13 and $14 a square foot in 2013 and 2014.
Population growth, the report adds, is the region's trump card, with 7.8% projected growth in the next five years.
Fort Myers: The average occupancy rate increased 1.3% to 90.3%, but the region's asking rental rates fell slightly, 0.5%, to $13.20 a square foot. Going back five years, Fort Myers has a notable up-and-down cycle with asking rental rates, and unlike the others on the Gulf Coast, hasn't regained its rates from 2011.
Naples: A surge in luxury spending has been a big boost for Naples. Average occupancy rose 1% to 91.2%, and asking rental rates jumped 3.8% to $18.39 a square foot — highest in the region and only 20 cents behind Palm Beach.