Retail Real Estate
Florida's strong retail market draws interest.
Lake Sumter market square at The Villages.
“The Villages has become a major retail destination,” says John Crossman, president of Crossman & Co.
John M. Crossman, president of Crossman & Co. in Orlando and president of the Central Florida Commercial Association of Realtors, is finalizing plans for Brownwood Paddock Square, a 350,000-sq.-ft., retail, restaurant and entertainment center in The Villages, a central Florida retirement community with 67,000 residents. “The Villages has become a major retail destination,” Crossman says. “Some of our stores do sales volumes equal to their counterparts in midtown Manhattan.”
Florida’s growing population and strong tourism industry make it highly attractive to retailers, despite the housing slowdown. “The residential crush was investor driven, but the number of people moving to Florida has remained the same — about 1,000 people a day,” Crossman says. “Since it’s estimated that you need about 10,000 people to support a new supermarket, that means we need a new grocery store every 10 days to keep up with demand.”
In addition, retailers in tourist areas benefit from visitors who spend an estimated five times as much on vacation as they do at home. “Retailers also look carefully at their merchandise returns,” Crossman says. “A good department store wants to keep those returns below 10%, and in Florida the average is less than 5%. After all, if you go back to Iowa, New York or England, you won’t return your purchase here. Therefore, a Florida store in a tourist area may have the same operating costs as other stores, but the margin will be 5% higher.”