Francis Rentz, CCIM, Managing Co-Director and Senior Advisor of Sperry Van Ness | Southland Commercial, was a featured guest speaker at the recent ICSC North Florida Idea Exchange that was held at the Ponte Vedra Inn & Club in Jacksonville, Florida. Rentz is an expert in the region and shared his insight and knowledge on the state of the real estate industry from Tallahassee to Pensacola, throughout the Panhandle of Florida. Discussion topics included key economic drivers in the region as well as signs of a recovery in these markets and an outlook on what key areas will be hot spots to watch for the future.
North Florida ICSC Idea Exchange – Regional Overview
The Tallahassee (Market Population –393,855) economy is driven by state government and universities (Florida State University – 40,000 students, Florida A&M University 12,000 students, and Tallahassee Community College – 8,000 students). State universities in Florida are highly dependent state government funding. The State of Florida has had a steady decrease in revenues from $73 billion just a few years ago to the $65 billion proposed budget number for the 2010 legislative session. Florida State University has had cuts in funding, and has eliminated over 500 positions and another 200 positions are slated to be cut when stimulus funding runs out in 2011 (unless another revenue source is found). Despite these cuts occupancy of Tallahassee retail space has fared reasonably well. Vacancy is up at all shopping centers but there are very few dark anchor spaces. The Tallahassee Mall is the only property with significant vacancy and continues on a downward trend. There are very few national or regional tenants actively looking for space in the marketplace. If you are leasing space, it is generally to local tenants. The one exception is Earth Fare, an organic grocery store, that reportedly leased 25,000 sf on Apalachee Parkway in the last 60 days.
Panama City is divided into 2 markets – Panama City and Panama City Beach with a combined year-round population in the market of 275,630. Panama City has an enclosed regional mall that is reasonably healthy, however there are several anchor vacancies in shopping centers around the mall. A new lifestyle center – Pier Park, was developed by Simon at Panama City Beach in 2006 that has attracted most of the retail growth to the beach area. The residential condo market on Panama City Beach is still very soft and has yet to find a bottom. There are still a large number of owners that have a mortgage in excess of $100k over the current market value. This means that you will not see a return to building any time soon, however the silver lining is that it will supplement the beach rental market which will allow tourism to remain strong. The biggest news out of Panama City is the relocation and expansion of the Panama City Airport. They have been able to attract Southwest Airlines to begin service to the Airport with connections to Nashville, Houston, Baltimore, and Orlando. This is the first time Southwest has served any airport in northwest Florida. This will offer a much needed connection for all the cities in Northwest Florida, which traditionally have only had reliable and consistent service to Atlanta, via Delta.
The Destin and Ft. Walton Beach (Market Population – 322,956) markets have softened like much of the state, however there are not any significant vacancies localized in any one property. The Destin Commons lifestyle center and the ever popular Silver Sands Outlet Center in Sandestin situated just over 3 miles apart remain as the premier shopping destination of northwest Florida. Eglin Airforce Base continues to gain missions while other military bases face downsizing or closure. The Army’s 7th Special Forces Airborne Group is locating its training and operations center at Eglin and the Airforce’s new F-35 will be based out of Eglin with 59 planes and crews. This is expected to increase the overall population by more than 6,000 people.
Be the first to comment
