1994 Orlando Retail Survey by Bob Andelman

Orlando retail developers are in the midst of a competition with their brethren to the west, in the Tampa Bay area, to build Central Florida's first truly upscale regional mall. To the victors, the spoils: Macy's, Saks Fifth Avenue, Bloomingdale's and so on.

"Central Florida really doesn't have an upscale mall. That's the next target," says Trammell Crow's Jimmy Grisham. "We don't have the demographics today, but there's a horse race to see who will do it for tomorrow."

As America's diamond department stores multiply their presence in South Florida malls, Central Florida developers hope the time has come when demographics and tourism numbers will lure the big boys a few hours north of Miami, Boca and the Palm Beaches.

Melvin Simon & Associates, the Indianapolis-based shopping center developer and manager responsible for the 4.2-million-square-foot Mall of America in Bloomington, Minnesota, announced plans in May to build a 1.2-million-square-foot galleria-style, upscale mall on a 390-acre site five miles southwest of downtown Orlando at the planned interchange of Interstate 4 and Conroy Road. The site is very close to Walt Disney World.

The mall will feature up to five anchor department stores, specialty shops and entertainment venues. It could be completed as early as Fall 1997, but no start date has yet been released. Simon hopes the center will be a mix of retailers already in the market with those not yet in Orlando.

"This whole mall craze in Orlando is pretty crazy," Grisham says. "Traditionally, the upscale mall is not where the demand is. But Mel Simon seems to be pushing it along. And I think Disney will accelerate their efforts to do something at Celebration. Pulling from Orlando, Tampa and Sarasota, it'll be a home run."

A sharp bump in upscale shopping options is still a few deals down the lane, of course. What else is happening in the Greater Orlando retail market?

"The hot areas are and have been Altamonte Springs, East Colonial, and the Florida Mall area, South Orange Blossom Trail at Sand Lake," says Tom Morbitzer, CEO of the Maitland-based Morbitzer Group.

Of his own activities, Morbitzer whose company manages and/or leases 4.5 million square feet, 60 percent of which is in the Orlando area points to the acquisition of the Longwood Shopping Center from the RTC as an "interesting situation." The 106,000-square-foot center, located at the corner of State Road 434 and US 17/92, was fraught with vacancies, 60,000 square feet in all, including a dark 22,000-square-foot former Winn-Dixie supermarket.

"Ingress and egress in the center is not good," Morbitzer explains. "But 434 is being widened. And, at the same time, there's a McDonald's on the 17/92 side. We're working on a deal where it gets moved. There's a street at that location which will then get a traffic light, so next year at this time, Longwood Shopping Center will be revitalized by that new signal."

Already, he says, leasing is picking up in anticipation of the improvements.

University Shops, a 105,000-square-foot Orlando strip (including four out-parcels) purchased from the RTC two years ago by Marc Katzen, has seen occupancy increase substantially from the mid-50s. "The center was only about five years old. It was a good center in a good location," Katzen says. "Practically everything is university-related because we're outside the gate to the University of Central Florida."

Among recent developments: construction of an out-parcel building for Miami Sub; Kinko's Copies has expanded three times in two years; University Credit nearly tripled its space; and a bookstore and restaurants have also signed on.

In terms of new projects, many of the country's biggest developers have projects in the Greater Orlando area.

Trammell Crow will develop an as-yet unnamed grocery-anchored center at Conroy-Windermere & Apopka-Vineland for the KMH Partnership. Work should start after Jan. 1, according to Jimmy Grisham, Crow's partner in charge of retail services for Florida.
The Crow office in Longwood focuses exclusively on third-party, fee-based development work, with 1.5-million square feet currently under lease and management and plans for building 200,000 more square feet by year's end. Grisham says the general climate in Central Florida for such projects is positive "considering where we've been. We're working with a couple big boxes that we'll either do site selection or development for. These large tenants don't need shopping centers, though; they can go free-standing."

Grisham says new power centers are having a tough time getting off the drawing board in the region because they can't justify land costs. He does expect that if any of the proposed upscale or regional malls actually get built any time soon, they will generate power centers of their own.

"The market's pretty active," he says. "It's not like the '80s, but it's active. Publix, Target and Home Depot are all expanding. A lot of tenants are doing new developments because of their expansion plans. The capital is coming back in the market, but you can't finance a shopping center with a small anchor and small stores. You have to be credit."

While Melvin Simon & Associates waits for the opportunity to take Orlando upscale, the firm has a traditional retail center already underway in Seminole County. The Seminole Towne Center, a 1.1-million-square-foot, two-level regional mall is scheduled for a September 1995 opening. Anchors will include Dillard's, Burdine's, Sears, JCPenney and Parisian, the latter making its Central Florida debut.

Homart Development Co. is in the DRI/rezoning process with the city of Ocoee, where it plans to start work this fall on a 1.5-million-square-foot, six-anchor regional mall (including 300,000 square feet worth of adjacent out-parcel developments). Opening of the unnamed mall is tentatively scheduled for Fall 1996.

"There's nothing magic about Ocoee," says Jim Grant, senior development director for Homart. "We're not talking about bringing any new players in. Your basic, one-level Florida mall. It's not a fashion market. We're serving the whole area. There's nothing on the west side of Orlando. There's an awful lot of growth going on on the west side. The East/West Expressway has been completed; it almost dead-ends with our site."

Grant believes there is more new retail activity in Orlando than anywhere else in the country. "Orlando is growing nicely; a lot of major mall developers are at looking at this market," he says. As an example, he cites the face-off between Homart, Mel Simon and another developer in Seminole County, where all three announced new malls on opposite corners. "We fell aside; Simon went forward," Grant say. "Fortunately, in Ocoee, no one else is building a mall."

end

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