Orlando's Changing Macro Retail Scene

ORLANDO—Big box stores are still en vogue but Orlando's retail scene is changing. From downtown to the suburbs, multifamily is driving new trends.

GlobeSt.com caught James Mitchell, senior vice president at CBRE, to get his thoughts on the current state of Orlando retail. We also asked him for his take on Downtown Orlando and what's in store for the region's retail in this exclusive interview.

Globest.com: How would you describe Orlando's retail environment?

Mitchell: Retail has definitely recovered significantly from the low of the Great Recession. That said, the recession really changed the landscape of the macro retail environment in Orlando.

For example, while big box expansion and super-regional power centers led the way through the last upturn, smaller, more focused retail is generating market growth now. Freestanding, single-tenant as well as small, two- or three tenant-anchored strip centers are the most active leasing products, propelled by the thriving restaurant, mattress, dental, telecom, and gas convenience store categories. As whole, retail vacancy continues to decline throughout the Orlando market—vacancy rate for the second quarter of 2015 fell to 6.2%—gas more space gets absorbed. 

GlobeSt.com: How is Downtown Orlando's housing growth impacting the retail market?

Mitchell: As goes new housing development, so goes new retail, especially in the more suburban markets. As it relates to the urban core, such as Downtown Orlando, new condo projects are spurring new restaurant and nightlife activity. However, unlike the Fort Lauderdale and Miami “high streets,” I don't think we will see traditional retail expansion in Downtown Orlando anytime soon.

That said, national retail is slowly starting to focus on Downtown Orlando. 7-Eleven opened three new stores within the last three years. Other national retailers will look at 7-Eleven's footprint and success will use that as a basis for considering downtown Orlando in the future.

GlobeSt.com: What will be the biggest retail demand drivers going forward?

Mitchell: New job and residential growth are two of the biggest economic drivers. MPF Research ranks Orlando as the number one metro in the nation for job growth through 2020, with a growth rate (2.7%) more than twice the national average (1.1%). Tourism and increased consumer spending are the other major factors.

Orlando remains the number one tourist destination in the world and we set an all-time record with over 62 million visitors in 2014. Disney and Universal Studios are seeing record visitors and International Drive has seen major redevelopment activity over the last 12 months.

The overall macro theme is definitely positive. We are in the midst of a major uptick, as the housing market continues to improve, especially in the more suburban markets, we will see continued improvement in consumer discretionary spending which in turn spurs new retail growth and activity.