Tampa Bay Retail Developers & Asset Managers by Bob Andelman

As retail space fills up and little new space is built in the Tampa Bay area, asset managers who survived the last few years look like geniuses and dormant developers chomp at the bit, eager for the race to begin anew.

Every year, the MADDUX REPORT tallies the numbers and presents lists of the most active retail developers and asset managers. As happened a year ago, the developer list shrank again; just five companies were even worth listing under the most liberal of criteria. Obviously, there's not much new construction.

The asset management list shows some shrinkage in the number of companies doing significant management work. As predicted a year ago, 1) institutional owners apparently prefer their holdings be handled by fewer parties, and 2) failed developers who switched horses and became asset managers when the bottom fell out of the spec markets have begun dropping out of management, too.

"A year ago, I was numb," says Bruce Strumpf, president of Clearwater-based Bruce Strumpf Inc. "I think things are loosening up. There's a lot of people looking and talking. It's a little tough to separate the lookers from the buyers. But at least they're looking. As long as they look you have a chance. But you gotta work to make a deal."

Strumpf operates several centers which are fully leased, "but you can go down the street and have a problem child," he says.

One troubled center from his past that's become a point of pride: Britton Plaza in South Tampa. "I think we have a vacancy or two, but nothing worth worrying about," Strumpf says. The news out of Britton, once a shambles, a blight on Dale Mabry Highway, has been nothing but good since Albertsons moved in and the center earned a facelift. In no particular order, Frank's Nursery and Crafts took a large out-parcel, Stein Mart came in and Muvico took over the old General Cinemas lease and gave the center's movie complex an attractive new look. Next up for Britton: Byron's is moving into the vacant Belk store and expanding its physical plant.

Strumpf isn't exactly dancing about the retail marketplace in general, but he will allow a ray or two of sunlight into his view of the road ahead.

"There are some retailers coming on strong," he says. "There are those looking for bargain leases because they feel retail real estate is depressed. Most of the weaker tenants have been shaken out. That creates vacancy. As long as they're not building new space, new tenants will absorb it."

Discount tenants such as Bealls, Dollar General and Family General are turning up in new markets, taking advantage of avails in second generation space. They're helping take the sting out of yesterday's dour leasing stories.

"Our phones ring, but it's not back to the way it was 5 or 10 years ago," says Mark Hackner, chief operating officer of Realty Management Co. in Tampa. "The landlords are still stretching to make deals and rents. This is not yet the time to be squeezing the last cent. It's like housing; there's more activity, but when you sit down with a tenant and you have five spaces and they need one, they're in the driver's seat."

Down south in Sarasota and Manatee, leasing activity continued strong in 1993 for NealMannausa Inc. Almost too strong.

"Gee, it was great!" says marketing director Sue McKibben. NealMannausa leased 193,000 square feet last year, 10,000 square feet less than the year before. But that's good news. "We're pretty well occupied in our anchored shopping centers," McKibben says. "We just don't have as much space to lease. It's fantastic for our clients and it was fantastic for us."

McKibben emphasizes was because all that leasing puts the asset management arm at NealMannausa almost out of inventory. The company's average retail vacancy rate of 5 percent is good news for clients and bad news for leasing agents.

Last year, the company leased 45,000 square feet in Bradenton's Oneco Square nearly half the center's available space. Oneco went from 50 percent leased to 99 percent in less than a year. Another NealMannausa center, Sarasota Crossing, was just 40 percent leased in 1991, outside of its anchor tenant. It now stands fully leased.

"I wish Sarasota County would reduce its impact fees so we could get some new construction under way," she says. "But I don't think it's going to happen in the immediate future."

Meanwhile, NealMannausa looks for more asset management contracts, opportunity to lease existing properties. There aren't many. "I've noticed a definite decline in bank foreclosures," McKibben says. "Those opportunities are slim in these two counties. We've seen our business from receivership decline, which is a healthy sign for the overall economy."

The NealMannausa shopping center sales people aren't complaining; the leasing boom makes retail centers a hot property again. "I think I'm going to make most of my money in sales this year," McKibben says. "We expect to see big gains in sales again this year."

Topping this magazine's asset management list and conspicuously absent from the developer list The Sembler Co. once again combines management of its own properties and others to rule the bay area.

"We selectively take asset management," says Sembler president Craig Sher. "We take properties big enough for us to work with so we can enhance their values. You can hire anyone to sweep sidewalks and collect rent. But there are only a few of us who can move tenants or use our contacts to bring in better tenants."

Among Sembler's newest asset management properties, Bayside Bridge Plaza (formerly Clearwater Marketplace) kept the company busy with 50,000 square feet worth of leases. "We cleaned it up, did multiple-tenant deals," Sher says. "One-Stop Auto, for example, did three deals with us simultaneously, one in a center we owned, two we didn't."

Another Clearwater property, Countryside Square, came under the Sembler banner for management last year. "The first thing we did was save them close to $100,000 in operating expenses the first month," Sher says. "We got rid of all their on-site people. Then we've had a net increase in new tenants. Countryside Square had an identity crisis because it was so bizarrely designed, architecturally."

Heitman Retail Properties, the Chicago-based asset management company which handles University Square (39,800 square feet in new leasing deals in 1993) in Tampa and Sarasota Square in Sarasota, should edge up the MADDUX REPORT's list in two years. That's when the planned expansion of University Square will open.

Both Heitman properties stand essentially full at 96 percent. The company spent much of 1993 renovating University, remerchandising it and signing leases for the coming relocation of Dillard to a new pad site and renovation of the current Dillard into movies and a food court. Sarasota needed less attention, although an additional department store may be on the way.

"You like to think all your tenants are doing your center's average, but in today's environment, there's always under-performers," says Joel Erickson, president of Heitman. "I don't think you ever get to a place where everybody's doing $500 a square foot and you can shut down leasing for the year. There's always challenges to get the maximum productivity out of the space."

end

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