Consultant Sees New Retail Surge Ahead

ORLANDO-The metro area’s record 50-million-sf retail inventory will look puny in the years ahead if the shopping center growth projections of industry consultant David W. Marks even come close to the mark.

Completing a two-year study of over 100 US town centers and downtown districts, Marks finds fast-growing Florida markets will need 5.6 million sf to six million sf of new retail developments annually for the next seven years at least to keep up with the needs of newly arriving residents.

That number is the equivalent of five regional malls such as Mall at Millenia (1.3 million sf) and Seminole town Center (1.1 million sf), he says. Marks is president of Maitland, FL-based Marketplace Advisors Inc.

“Perhaps the greatest pressure will be for mixed-use neighborhood-sized retail facilities,” he says. “We’re looking at 25 to 30 new grocery-anchored neighborhood centers or super centers annually just to keep up with population growth–and that doesn’t count replacement of old or outmoded retail facilities.”

Using new population trends analyses from the Florida Legislature’s Office of Economic and Demographic Research, Marks finds about 290,000 new residents are expected to arrive in the state each year through 2010.

“The rule of thumb in municipal planning is approximately 20 sf of retail space per resident,” the consultant says. “That rule of thumb includes all types of retail properties, from neighborhood centers to free-standing, big box retailers such as Wal-Mart or Home Depot to regional shopping malls.”

Retail owners will also have to begin marketing and designing their properties for a newer base of customers, Marks says. Using the state’s demographics, he explains the report projects a loss of almost 90,000 people aged 25 to 44. “But they aren’t disappearing exactly,” the consultant says. “They’re aging faster than the population growth is replacing them.”

He adds most of the population growth over this decade will be from the 45- to 64-age group, a sector that is projected to grow by 1.6 million people between 2000 and 2010. Florida has 16 million residents, according to the last US Census.

Marks says the new properties will have to be designed to attract “these middle-aged consumers who have different buying habits than the younger 25 to 44 age group. Their kids are aging and going off to college; they have smaller household sizes; and they are more focused on their home and home ownership.”