Southeast Power Center Trends To Watch

ATLANTA—In more than a dozen power centers that have been recently completed or are under development, Hobby Lobby is the leading anchor—and according to a Franklin Street Retail Investment Advisors Report a similar tenant line up follows. That line up includes Ross Dress for Less, TJMaxx, Marshall’s, Ulta, Petco and Petsmart. According to Franklin, these tenants are leading the way in expansion into secondary markets and power center developers have followed suit in chasing a similar tenant lineup to make deals work. Investors have been accepting of the lineup as well because of the strong credit of the tenants. caught up with Bryan Belk, senior director of Franklin Street Atlanta, to get this thoughts on these trends in part one of this exclusive interview. Be sure to watch for part two, in which Belk will discuss power center sales and pricing trends in 2016. What trends are you seeing in power center development throughout the Southeast?

Belk: We are typically seeing new builds in the 150,000- to 180,000-square-foot size, which is smaller than most of the traditional sized power centers. With tenants changing their prototype over the years this is what the markets are giving developers when they go to lease centers. Hobby Lobby has been a main anchor driver for the developments because of their expansive growth in secondary markets. There’s been a lot of talk about value concepts and pet stores during the past few years, so why is Hobby Lobby such a desirable tenant for secondary and tertiary development?  

Belk: One reason is they are a traffic generator. Second is that they take a large chunk of space so developers are able to take down the 20+ acres they would typically need filled in order to build a power center, and give them coverage to begin to fill in the secondary tenants that are in the range of 10,000 to 20,000 square feet. With the number of potential anchor tenants shrinking, are the days of big-box anchor tenants passed, or do you believe we’ll see new big-box concepts emerge?

Belk: I think there will always be a certain need for centers like this because as much as people like to buy stuff online, they also like to touch and feel the goods too.  The tenant depth in most categories has shrunk through consolidation but many of the tenants in these types of center have seen continued same store sales growth.

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NGKF Negotiates 117,018 SF Corporate Headquarters Lease in Tampa

TAMPA, FLA. — NGKF has arranged a 117,018-square-foot lease extension for TRAK Microwave Corp.’s corporate headquarters and manufacturing facility. The manufacturer has restructured its lease for flex space at 4726 Eisenhower Blvd. in Tampa. Clay Wommack of Franklin Street represented the landlord, Chew Family Tampa LLC, in the transaction. John Esposito of NGKF represented TRAK Microwave Corp., which is owned by Smiths Group.

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Technology Manufacturer Inks 117,000-SF Lease

ORLANDO—TRAK Microwave, part of Smiths Interconnect, just inked a 117,000-square-foot lease at Eisenhower Technology Park in Tampa, FL. The firm manufactures technically differentiated electronic and radio frequency products.

Clay Wommack, director of office and industrial leasing agency for Franklin Street, represented the building’s ownership, The Chew Family Trust. Chew is based in California,

“This is a great location for TRAK Microwave and gives the company room for growth with extensive parking for employees and additional acreage available to expand if necessary,” says Wommack. “It’s also right near the airport with convenient access to highways for ease of travel.”

The company signed a seven-year renewal for the facility, which is located in Eisenhower Technology Park at 4726 Eisenhower Boulevard. TRAK Microwave has been a tenant in the building for more than 30 years. The company has more than 200 employees at the Tampa location and more than 400 employees companywide.

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Franklin Street Valuation Advisory Hires Registered Appraiser Trainee

Victor Torres

Date Added: March 28, 2016

Submission Type: New Hire

Current Employer: Franklin Street

Current Title/Position: Registered Appraiser Trainee

Industry: Commercial Real Estate

Duties/Responsibilities: Torres is responsible for assisting with the preparation of team appraisal reports including conducting research and data verification, market and trade area analysis, exhibit preparation, financial analysis, and assisting in report writing. He focuses on properties throughout Florida.

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Real Estate Services Adds Retail Leasing Associate

Matt Alexander

Date Added: March 28, 2016

Submission Type: Promotion

Current Employer: Franklin Street

Current Title/Position: Associate

Industry: Commercial Real Estate

Previous Position: Research Assistant

Alexander specializes in leasing and landlord representation for clients throughout Tampa Bay and the west coast of Florida.

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Franklin Street Arranges 117,000 SF Lease at Eisenhower Technology Park

Franklin Street, a full-service commercial real estate company, arranges the lease of 117,000 square feet to TRAK Microwave – part of Smiths Interconnect, a leader in technically differentiated electronic and radio frequency products.

Clay Wommack, director of office and industrial agency leasing for Franklin Street, represented the building’s owner, The Chew Family Trust, LLC, based out of California.

The company signed a seven-year renewal for the facility, which is located in Eisenhower Technology Park at 4726 Eisenhower Blvd. in Tampa, Fla. TRAK Microwave has been a tenant in the building for more than 30 years.

“This is a great location for TRAK Microwave and gives the company room for growth with extensive parking for employees and additional acreage available to expand if necessary,” Wommack said. “It’s also right near the airport with convenient access to highways for ease of travel.”

TRAK Microwave has more than 200 employees at the Tampa location and more than 400 employees companywide.

### About Franklin Street: Franklin Street is a family of full-service real estate companies focused on delivering value-added solutions to meet the evolving needs of clients. Through a collaborative philosophy of leveraging the resources, expertise, and experience of each of its divisions—Real Estate, Capital, Insurance, Management and Valuation—Franklin Street offers unmatched value and optimal solutions for clients nationwide. For more information on Franklin Street, please visit

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Tampa’s Strong Job Growth Leads to Retail Market’s Boom

Tampa’s retail market has achieved a full recovery, as proven by rising rents and the tightening of space, making it ripe for new construction. Tampa has historically been a $16 per square foot average rent market, but rents are expected to climb as high as $18 per square foot on average in the coming years.

Fueling the recovery, Tampa’s job growth continues to outpace the rest of the state. The Tampa-St. Petersburg- Clearwater market led Florida’s metropolitan areas in job creation in the fourth quarter of 2015, according to the Hillsborough Economic Development Corp., with an additional 38,800 jobs created, a 3.1 percent year-overyear increase and a 138 percent increase in the same period from 2013 to 2014. Many new jobs announced last year will be filled in 2016, supporting growth in the office, housing and retail sectors, as well as a strong overall economy.

Boom in Development

The biggest retail opening in recent months was Simon Property Group’s Tampa Premium Outlets, which was 100 percent leased when the 441,000-square-foot property opened in October 2015. The property is located within the Wesley Chapel area, which has been a hotbed of retail activity since the Shops at Wiregrass opened in 2008. In a similar vein, Tampa Premium Outlets has already sparked additional development adjacent to the property and across State Road 56. Costco Wholesale is currently under development on a 155,000-square-foot store west of the property, and there’s talk of a potential power center on parcels of land on the north side of State Road 56. There will also be numerous freestanding and smaller multi-tenant retail and restaurant projects on both sides of SR 56. The Shops at Wiregrass is also working on a Phase II expansion.

Southeast Hillsborough County has been another hotbed of activity thanks to the addition of St. Joseph’s Hospital- South, which opened last year. Two more hospitals are planned in the area, and the corridor is likely to become a regional medical destination. The trade area is currently underserved for retail and restaurants, and as a result we expect to see some new development taking shape there to serve the growing demand.

Hyde Park Village in south Tampa is undergoing a long-awaited redevelopment. WS Development is successfully transforming Hyde Park Village by adding new-to-market retailers such as Suitsupply, The Shade Store and Vineyard Vines, as well as new restaurants Bartaco, On Swann, Meat Market and a revival of iconic Tampa restaurant brand Goody Goody. 

Downtown is becoming more dense and urban, with numerous development and redevelopment projects that will add more residents and additional retail space to the area. The relocation of the University of South Florida Medical School to downtown is a game changer and will certainly fuel the demand to live, work and play downtown. We are excited to watch and participate in the redevelopment of Channelside Bay Plaza, which Franklin Street manages and leases.

Retailers Seeking Entry

In Tampa we are seeing similar trend lines to what’s occurring nationwide, with grocers, sporting goods stores and restaurants seeking to grow withinor enter the market. While Florida has been and will likely continue to be largely dominated by Publix, organic grocers such as Sprouts Farmers Market, Earth Fare and Lucky’s Market are actively seeking space. Grocery stores remain a strong anchor for new developments and redevelopments, and we expect to continue to see them pop up on site plans in coming years. 

Sporting goods retailers including Bass Pro Shops and Dick’s Sporting Goods have had solid expansion in the market, and Cabela’s and Academy Sports + Outdoors are both rumored to be working on sites in Tampa Bay. Even with Sports Authority announcing its bankruptcy in early March, there is actually potential for some of those locations to be backfilled by other sporting goods retailers.

The big growth category remains quick service restaurants (QSRs). With a more stable economy, people are spending money to go out to eat again, and developers and landlords are seeing restaurants serve as anchor tenants. With the strong demand for restaurant space, landlords have the ability to qualify and choose the appropriate restaurant concepts to anchor their properties. Even established chains are having limited success securing new locations. There are numerous full-service restaurants and QSR brands struggling to find suitable real estate for their first locations in the market. Rising rents and strong demand are finally fueling an upcoming wave of retail development and redevelopment that will help usher new tenants to the market.

Strong Investment Sales

With the triple-net and multifamily markets at pricing higher than what we saw pre- recession, buyers have looked to retail to achieve higher yields. Tampa and Central Florida are unique to other areas of the state in that the foreign buyer that started buying in southeast Florida has had to move north to find better yields as returns are further compressed in the
southern part of the state.

Historically low interest rates, uncertainty in other investment vehicles like stocks, bonds and energy and a lack of supply have all contributed to the resurgence of the retail market. While cap rates on triple-net and Publix grocery- anchored shopping centers are at historic lows, cap rates for unanchored retail or non-grocery anchored centers are still very attractive in today’s frothy market. Generally speaking, cap rates today for this product have not dropped to what we saw in 2007 and 2008 but are getting close to those numbers. Brokers have continued to push cap rates down, but in the last six months we have started to see that buyers are starting to push back on how low they will go.

We are seeing a lot of “price reductions” or deals sitting on the market because brokers pushed the envelope beyond what the buyer pool is willing to accept. We do not foresee much change to the cap rates or sales velocity in 2016 even if the Fed increases the fund rate another 25 basis points.

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PGP closes on $47M land deal near Town Center; project to bring ‘unique’ offerings

With the purchase of 45 developable acres near St. Johns Town Center a done deal, buyer Preferred Growth Properties is expected to soon lay out plans for the construction timeline and tenants.

“There are multiple, unique and exciting offerings that are programmed for the development and details will be forthcoming,” said property representative Chris Morgan, CEO of Cantrell & Morgan Inc. of Jacksonville.

He and Cantrell & Morgan President Jim Loftin represented Preferred Growth Properties in its $46.95 million purchase of the property from members of the Skinner family.

The deal closed Friday, according to Chip Skinner, a member of the family and one of the landowners.

Preferred Growth Properties, a subsidiary of Birmingham, Ala.-based Books-A-Million Inc., bought the property through PGP Jacksonville TC LLC, Skinner said.

The site is at Gate and Town Center parkways. The main tract is east of Gate Parkway and runs north and west along Town Center Parkway. A smaller tract is west of Gate Parkway. Both include lakefront footage.

“From the plans we’ve seen, they will make good use of that lakefront,” Skinner said.

Preferred Growth Properties executives have not returned phone calls or emails. Morgan said Sunday he is designated as the company contact for now.

The Skinner family rezoned the property as a Planned Unit Development district for commercial and residential uses. City Council enacted the ordinance in May.

Permitted uses are up to 500,000 square feet of enclosed retail and commercial space, 100,000 square feet of office space, up to 400 hotel rooms and up to 500 multifamily residential units.

While PGP has not announced tenants or users, two surfaced in November when a retailer and an apartment developer confirmed plans to open there.

Oklahoma City-based Hobby Lobby said it would open one of its arts, crafts and home-decor stores on the property. It would be the fifth Hobby Lobby in the area.

Houston-based Stanmore Partners said it was under contract to buy land from PGP for a 347-unit apartment community, called Ravella at Town Center Apartment Homes.

That project would be developed on about 6.6 acres at northwest Town Center and Midtown parkways.

“As you can imagine with a project of this size, there are incredible amounts of planning and design that are invested,” Morgan said.

He defers to PGP about the construction team and development schedule.

Morgan said no retail sites are being sold and that PGP or one of its entities will serve as the landlord.

“We feel like the additional activity that they are going to bring to the area from a retail, residential and hotel perspective is going to really add to the already growing and vibrant area,” Skinner said.

Traffic improvements

Skinner said $3 million to $4 million in transportation improvements are planned by the developer.

PGP plans to make traffic improvements at Gate and Town Center parkways, including adding turn lanes, access points and a trail for pedestrians, runners and bicyclists.

Nearby District 11 Council member Danny Becton said Sunday that as one of several council members representing Southside, traffic improvements are a major focus for him.

“The challenge, as with any growth-oriented area, is always traffic and the transportation network that supports it,” he said.

He said his background in growth management and transportation has been helpful in working with agencies such as the city Public Works and Planning and Development departments, the Jacksonville Transportation Authority and the Florida Department of Transportation.

Becton is working with development of two major projects along Gate Parkway in his district — the IKEA furniture superstore and a 105-acre mixed-use project proposed by the Hines group.

PGP also will have company to the north. Its site is directly south of the Town Center Promenade, a new development by Atlanta-based Core Property Capital to include apartments, a hotel, retailers and restaurants, with several of them new to the market. Core Property Capital paid $23.5 million for 30 developable acres.

“The closing on this project continues to demonstrate that Southside will see tremendous growth over the next 10, 20 and 30 years,” Becton said.

He said the growth will bring jobs and an increased tax base to the city, and the new residents will be patrons of the area’s businesses.

Becton also believes the trend will continue to blend retail operations and surrounding residential communities near the Town Center.

Creating a retail destination

Morgan said the project is “yet another validation for the Jacksonville retail market.”

Carrie Smith, regional managing director for the Franklin Street of Jacksonville commercial real estate firm, said Sunday a deal of PGP’s scale “shows that Jacksonville is a place businesses want to invest in.”

Preferred Growth Properties has been working on the project at least since February 2015, when Skinner confirmed the property was under contract. A Cantrell & Morgan website posting showed a project there by Preferred Growth Properties.

The Skinners applied for the rezoning, which outlined a 61.35-acre site comprising 45.02 acres of upland acres and 16.33 acres of lakes and ditches.

In March 2015, as the city was reviewing the rezoning application, landowner attorney T.R. Hainline said the sale could be completed by year-end. PGP then said in September it expected to complete the property purchase in January.

That date passed with no new date from PGP, although Skinner continued to confirm the land was under contract.

“There is a tremendous amount of work that goes on behind the scenes, and from the inception everyone has rolled their sleeves up and are working together toward a successful conclusion,” Morgan said.

Smith said there may be more deals.

“The area immediately around the St. Johns Town Center continues to demand some of the highest dollars, in land price and lease rates, in all of Northeast Florida,” she said.

Given the demand for commercial, residential and hotel space, she thinks more projects will be announced in the coming months.

Geneva Henderson, executive vice president of the Lat Purser & Associates commercial real estate services firm, said Sunday the project will be a significant draw for new retailers coming to Jacksonville.

The center, along with IKEA and the Topgolf project under construction near St. Johns Town Center, continues to bring “top-named retailers and restaurants into a market with the highest sales in North Florida,” she said.

St. Johns Town Center brought in Nordstrom, Tiffany & Co. and other major retailers and restaurants exclusive in the market, while Town Center Promenade will feature the area’s first Red Robin Gourmet Burgers and Brews, among other new names.

“Retail shopping is on par with any major retail market in the Southeast,” Henderson said.

The Town Center Parkway property is PGP’s second, but by far the largest, deal in Jacksonville. PGP Jacksonville LLC paid $4.7 million in July 2014 for the Mandarin South Shopping Center at 11700 San Jose Blvd.

Its site says Mandarin South will be redeveloped into a high-end lifestyle center “with the PGP signature style and top-tier retail branding.”

While no redevelopment construction has begun, a tenant at the 70,000-square-foot center recently relocated. A Wood You Furniture owner said PGP told the company that Earth Fare had signed a lease there for a grocery store.

Preferred Growth Properties’ website shows that it owns four properties — Mandarin South along with the two-phase Magnolia City Place in Gardendale, Ala.; Renaissance City Center in Florence, Ala.; and Lafayette City Place in Fayetteville, N.C.

Books-A-Million develops and manages commercial real estate investments through Preferred Growth Properties.

Books-A-Million became a private company again in December. Its three Northeast Florida stores are in Regency Park in Jacksonville and in Jacksonville Beach and Orange Park.
(904) 356-2466

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FCP Getting Serious About Florida Multifamily

ORLANDO—Belara Lakes Apartments at 8402 North Waterford Avenue in Tampa, FL, has traded hands. Federal Capital Partners acquired the multifamily asset for $22.4 million.

“The acquisition of this well-located Tampa community is consistent with FCP’s strategy of investing in quality multifamily communities that appeal to a broad range of residents,” says FCP vice president Jason Ward. Nick Meoli of the Meoli-Donaldson team at Marcus & Millichap represented the seller.

The 324-unit multifamily community is located between the North Dale Mabry Highway retail corridor and Interstate 275. That gives multifamily tenants immediate access to the Westshore Business District, Tampa International Airport, International Mall and Raymond James Stadium.

The Belara Lakes acquisition marks the company’s first equity investment in a multifamily acquisition in Florida. The acquisition is FCP’s second investment in Florida in the last 90 days.

“We continue to see demand exceeding supply for well-located apartments in the Tampa Bay MSA,” Kevin Kelleher, senior director of multifamily sales in Franklin Street’s Tampa office, tells “Pricing has certainly increased, but relative to other markets in the US, investors are finding value and growth potential in our market. We believe this trend will continue into 2016 despite the additional supply coming to the market.”

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Exclusive: Atlanta’s Reynoldstown lands townhome development near Beltline

One of Atlanta’s hippest neighborhoods is adding 23 contemporary  townhomes.

Tampa, Fla.-based Icon Residential reported the townhomes will be priced from the $300s to the $400s and  feature five 1,750- to 2,100-square-foot floorplans  with  rooftop terraces.

The development- dubbed Reynolds Square- will be located near the  Edgewood Retail District in Reynoldstown.

Icon Residential Principal Mike Bednarski, a managing partner with the developer, said Reynolds Square will be the catalyst for smart residential redevelopment  and will  bring additional  growth Reynoldstown,

“Our team’s core strategy is to re-urbanize alluring neighborhoods near city centers that offer a live-work-play environment,” he said. “We’ve hit an inflection point where it is a better value to buy rather than rent apartments with rent growth appreciating considerably over the last few years.”

Bednarski added the monthly cost of a unit at Reynolds Square is comparable to a two- or three-bedroom  apartment that is 40 to 50 percent smaller.

Ricky Jones, a director in Franklin Street Real Estate Services’ Atlanta office, said developments around the Beltline that have been delivered have been absorbed very quickly, and demand and prices continue to rise on the intown, walkable, well  located townhomes.

“Weiland with ‘Square at Glen Iris’, Cablik with ‘Skyhill’ and ‘+71 Lucy’, and Epic with ‘Watertower Stacks’ have all been active in the intown townhome scene and all have products that have either recently delivered or will be delivering in the next 12 months in very desirable locations, specifically around the Beltline,” he said. “The sales price has inching up to around $300 per square foot as the well located inventory is taken off the market.”

The first residences are expected to be completed by late 2016 with the first residents moving in January 2017.

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