Florida West Coast Called Retail Hot Spot

ST. PETERSBURG, FL-Retail property investors are zeroing in on the west coast of Florida, "one of the most desirable areas in the country" right now, Trammell Crow Co. senior vice president of retail investment sales John M. Crossman told an International Conference of Shopping Centers seminar here.

Crossman said the volume of centers being sold on the west coast "continues to be very strong." Driving investor interest are four factors: strong demographic growth; low interest rates; lack of competition of capital; and acceptance of real estate as an acceptable investment vehicle.

"As long as people continue to move to the west coast and vacation there, the need for new retail development and retail sales will remain strong," Crossman told ICSC members attending the regional overview at the St. Petersburg Hilton Hotel. "Favorable financing conditions increase the ability for investors to complete transactions."

Crossman said the stock market has been "flat and office and industrial leasing has not been as strong as retail." Those market conditions make retail "a bright spot" for investors.

"In the 80s, real estate investment was perceived as high risk/high return and was avoided by some investors," the senior Trammell Crow broker said. However, "over time, real estate and specifically retail, has proved itself as a stable acceptable investment vehicle."

For example, Crossman said, REITs "have out-performed the market over the past five years. In addition, grocers, such as Publix, saw increases in their sales following such negative events as 9/11 and the [four] hurricanes [in Florida in August/September 2004]. Regardless of conditions, consumers need to eat."

Crossman cautioned that "threats to continued soaring retail investment deals include a potential increase in interest rates, coupled with an improvement in stock market investments and growing competition for capital--each of which could divert investments from the retail market."

He said that "if asked to make a forecast, I believe both of those events are likely, but retail investment sales will continue to be strong as retail fundamentals are so strong" at this time.

Crossman is confident all areas of Florida's west coast will do well in the near future. "Ten years ago, the Naples address achieved superior pricing and other areas were discounted," the broker recalled. But "that is not true today. While Naples has not lost its luster, the growth of the rest of the coast has increased its appeal."

Crossman said among west coast Florida markets expected to continue attracting investors are Tampa Bay, St. Petersburg, Bradenton, Clearwater, Sarasota, New Port Richey, Tarpon Springs, Naples, Fort Myers, Cape Coral, Venice, Englewood, Dunedin, Largo and Bonita Springs.