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ORLANDO-Grocer-anchored shopping centers are money in the bank to national investors this year and Publix-anchored properties are leading the buy-me-now list with runaway market share numbers, a Trammell Crow Co. retail market forecast for 2002 shows.

The 691-store Lakeland, FL-based supermarket chain is out-distancing its nearest rival, the 1,073-unit Winn-Dixie Stores Inc. of Jacksonville, FL, as No. 1 on national investors’ buying lists, the study says. That’s a 180-degree turnaround from 1999 when Winn-Dixie led all grocers in Florida with a 57% market share.

Publix market share three years ago was only 21% but the chain moved ahead for the first time in 2000 with 45% market share, then improved that number to 60% in 2001. At the same time, Winn-Dixie slumped to 9% in 2000 but rallied to 13% in 2001.

Crow didn’t list an estimated market share for either company for 2002. But other brokers tell GlobeSt.com on condition of anonymity Publix is expected to wind up this year with 65% market share against Winn-Dixie’s improved 15%.

“This is predominantly due to Publix’s financial strength,” Crow senior vice president John M. Crossman says in the report. “This trend will continue until Winn-Dixie starts to improve or another grocer shows rapid growth.”

Other grocers, however, are nowhere near the two leaders, according to Crow’s research and rate much lower in investor demand as a result. For example, Albertsons, Food Lion, More 4 Less and Whole Foods each had 7% market share. A scattering of other retailers had less.

“With the increase in demand for Publix, there has been a dramatic increase in neighborhood center sales,” Crossman says. “With recent bankruptcies, power-center demand has decreased” and “single-tenant building demand has (also) decreased, partially because of Eckerds.”

Crow’s research shows 64% of investors in 2001 favored neighborhood centers compared to 30% in 2000 and 44% in 1999. Unanchored and single-tenant structures were preferred only 12% of the time in 2001. Community centers came in at 8%.

Power centers held investors’ attention 4% of the time both in 2001 and 2000, an improvement from zero percent in 1999.

Average per-sf sale prices are heading north. From an average $62.32 per sf in 1999, the price rose to $67.67 per sf in 2000 and $89.11 in 2001.

Other brokers tell GlobeSt.com on condition of anonymity the per-sf price is expected to come in at an average $95 per sf for class A, Publix-anchored properties this year.

Average sale prices last year were $8.7 million versus $6.1 million in 2000 and $5.8 million in 1999. Those numbers will be much higher at the end of this year, GlobeSt.com research shows.

For example, Inland Retail Real Estate Trust Inc. of Oak Brook, IL, the most aggressive shopping center buyer in Florida and Georgia, is paying an average $100 per sf this year for one-year-old and two-year-old, Publix-anchored assets compared to about $95 per sf in the last two years.

At the same time, cap rates “have decreased slightly since 1999, following right in line with the steady decline of interest rates,” Crossman says.

In 2001, for instance, Crow found average cap rates at 10.08%. That compares with 10.11% in 2000 and 10.2% in 1999. Other brokers tell GlobeSt.com cap rates this year will average 10%.

Average occupancy rates monitored by Crow in the 295 buildings totaling 42.67 million sf were 92.36% in 2001; 95.56% in 2000; and 88.05% in 1999.

The 7.88% vacancy level in 2001 was up .05% over 7.83% registered in 2000. There is at least 3.36 million sf of vacant shopping center available in the 19 submarkets checked by Crow.

At the end of last year, the 1.78-million-sf Casselberry/Winter Springs submarket had a 19.6% vacancy mark, the highest in metro Orlando.

Right behind was East Colonial Drive, 2.63 million sf and 11.47% vacant; Sanford, FL, 2.1 million sf and 11.14% empty; and St. Cloud, FL, 495,650 sf and 10.29% vacant.

The 1.4 million-sf Apopka, FL submarket, 3.58% vacant and down from 11.08% in 2000; and the St. Cloud area, down 18.12% in 2000, saw the biggest decreases in vacancies, “due to a large box being filled in a small market,” Crossman says. “Both markets will be challenged by the Kmart bankruptcy.”

The Southwest and Sand Lake Road tourist markets are seeing increased vacancies from “decreased tourist traffic and increased competition,” the Crow report says. “Owners within these markets will probably describe 2002 and 2003 as The Best of Times and The Worst of Times,” Crossman says.

The Crow executive projects “over two million sf will be added (to metro Orlando’s inventory) in 2002, due mainly to the Millenium Mall project (1.3 million sf).”

However, Crossman says, “this amount of increased competition, combined with decreased tourist numbers, could devastate portions of the submarket and several of the submarkets that surround it.”

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