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Pensacola is poised for a surge in commercial real estate growth after Hurricanes Ivan and Dennis took their toll on the city in 2004 and 2005, respectively. Although the storms walloped developers with dramatic and simultaneous increases in the cost of materials, labor, insurance and land, positive effects include “putting Pensacola on the map for national developers,” according to John Fifer, an associate with Coldwell Banker Commercial United Realtors in Pensacola.

Big-box retail is gaining momentum as developers start to see some settling down in land costs with Home Depot, Lowe’s, Target and Kohl’s entering or expanding within the market. Publix is also on the move and will soon open its first Santa Rosa County supermarket in Gulf Breeze.The University Mall redevelopment by Simon Property Group from an older, enclosed mall to a new-and-improved, 800,000-sf lifestyle center is also significant. Estimated for completion in 2009, the center is now anchored by JCPenney, Belk and Sears and will become a first tier or upscale shopping destination that the market was previously lacking. Rental rates are being quoted at $26 per sf.

Overall, the combined shopping center inventory in Pensacola’s two-county market totals nearly 12.4 million sf, with average rental rates of $13.41 per sf in Escambia County and $15.45 per sf in Santa Rosa County. Retail stores are 94.4% occupied in Escambia and 92.6% occupied in Santa Rosa, according to Coldwell Banker Commercial United Realtors.

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