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Southeast Real Estate Business: Pandemic may lead to opportunities for Orlando’s most resilient retailers

By Terrence Hart, Senior Director of Retail Services with Franklin Street

For the Orlando retail market, which relies heavily on Central Florida’s $75 billion tourism industry, the impact of the COVID-19 pandemic has been twofold. Not only has the local consumer base begun relying more heavily on online shopping and home-cooked meals, but the number of out-of-state and international visitors who typically travel to Central Florida for its renowned theme parks and attractions has plummeted.

Statewide, Florida’s tourism industry suffered an estimated 60.5 percent drop in visitors during the year’s second quarter, with international travel down more than 90 percent, according to Visit Florida.

Submarkets built around Walt Disney World, the Orange County Convention Center and Universal Orlando, such as International Drive, the U.S. Highway 192 Corridor and Celebration, have taken an especially hard hit. Many restaurants designed around a sit-down experience will not recover. Although creative solutions are in action, sidewalk seating and ghost kitchens can only generate so much revenue to recover restaurants’ already razor-thin margins.

But out of the slump have come opportunities for some retailers to shine, whether they’ve adapted their business model or already happened to have pandemic resistant infrastructure in place. Further, as the winners and losers of COVID-19-era retail become clear, retailers and restaurants that prevail are positioned to gain access to better real estate, more generous lease options and, potentially, discounted rents.

Read Terrence Hart’s full guest column in the August 2020 edition of Southeast Real Estate Business.

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NAIOP Hall of Famer Joins Franklin Street as Regional Managing Partner in Tampa

Tampa, Fla. – Franklin Street, a full-service, commercial real estate firm, recently hired Patrick Kelly as regional managing partner for the Tampa Bay area.  Kelly replaces Brad Robinson, who now serves as the chief learning and development officer, a national role within the company. Kelly will provide strategic guidance for Franklin Street, helping to grow the firm’s market share and expand its investment sales, capital advisory, insurance, property management, project management and tenant and landlord representation services throughout Tampa Bay.

“Pat’s more than three decades of experience in commercial real estate, capital markets and management will take our business development and talent recruiting efforts to the next level,” said Franklin Street’s Kurt Keaton, president of Real Estate Services and Management Services. “His strong transactional and development background within multiple asset classes will help Franklin Street offer substantial expertise on behalf of our private and institutional clients. Pat is a tremendous cultural fit and his diverse experience fits perfectly with our integrated platform across all product types.”

Prior to Franklin Street, Kelly served as president for Redstone Commercial, a major commercial real estate brokerage and development firm with over 75 properties totaling more than 4.5 million square feet in 15 states. Kelly’s initial industry experience stems from his debt and equity background, having financed multiple office properties throughout Florida and the Rocky Mountain states. 

His capital markets focus shifted to commercial development when he became the Florida regional partner for one of the country’s largest developers, The Vantage Companies. Kelly managed the development of over 2 million square feet of flex and Class A office, industrial and retail product throughout the Southeast. Previously, he worked as managing principal of a company that managed, leased, and sold over 10 million square feet of commercial real estate assets within multiple markets in Florida, along with Atlanta, Raleigh, Memphis, Nashville and Denver. 

In Tampa Bay, Kelly led the infrastructure development for several office parks (Carillon Park, Highland Oaks, University of South Florida Research Park, Crescent Park). He also negotiated many large office lease transactions, representing both tenants and landlords, including Franklin Templeton, GTE, Aegon, PBS&G, New York Life, URS Greiner and the Perot Group. In 2014, Kelly was inducted into the NAIOP (formerly the National Association for Industrial and Office Parks) Tampa Bay Hall of Fame in recognition of his significant contributions to commercial real estate and the Tampa region.

“I was very impressed by Franklin Street’s core value-add focus and how they collaborate on various business lines like investment sales, leasing, property management, project management, insurance and capital markets,” said Kelly. “I am thrilled to join the team during this accelerated growth period and look forward to building our brand throughout the Southeast and nationally.” 

Kelly, a sixth-generation Floridian raised in Miami, holds a bachelor’s degree in Business from Florida State University. He is actively involved with Florida State University’s Real Estate Program, International Council of Shopping Centers, NAIOP, Real Estate Investment Council of Tampa Bay and Tampa’s Westshore Alliance. 

About Franklin Street: Founded in 2006 during one of the toughest real estate climates, Franklin Street 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 – Investment Sales, Tenant and Landlord Representation, Capital Advisory, Insurance, Property Management and Project Management – Franklin Street offers unmatched value and optimal solutions for clients nationwide. Learn more about Franklin Street at FranklinSt.com.

 
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Trends

Small business, big impact: Keeping Jax’s holiday shopping local

Excerpted from Jacksonville Business Journal story.

On a statewide level, business owners remain positive about both their own business and the local economy. In a PNC Economic Outlook survey, 55 percent of business owners felt optimistic about their own business and 46 percent felt optimistic about the local economy. Earlier this year, WalletHub named Florida the No. 6 best state to start a business in.

Although optimism may be high, risks are too. For the greater Jacksonville area, rents have risen 12 percent year-over-year. CBRE Florida Research Manager Scott Brien, in a previous interview with the Business Journal, said the primary cause of the increase is Jacksonville’s 2 percent annual population growth rate. Construction costs are up too, according to Franklin Street Managing Director Carrie Smith in a previous interview with the Business Journal, with costs being passed on to tenants in the process.

For full story, visit https://www.bizjournals.com/jacksonville/news/2019/11/27/small-business-big-impact-keeping-jax-s-holiday.html

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Ask The Expert Trends

Ask the Expert: What are the most sought-after office amenities in Tampa?

Ask the Expert: What are the most common office amenities sought by tenants in Tampa?

“The top amenities are highly dependent on the type of office tenant and their specific culture. For example, a tech start-up, an established law firm, and a medical device sales company will all have very different needs. In no particular order, here are the most commonly requested amenities: deli/food service, building conference/training rooms, fitness facilities, and reserved parking spaces. 


As office densities continue to intensify and businesses work to reduce occupancy costs, amenities begin to play a huge role in making the tenant experience as enjoyable and productive as possible. Fortunately for Tampa, we have several sophisticated, modern landlords who invested heavily into their buildings to offer a range of fantastic amenities.”

Kyle Chaikin
Senior Associate, Office and Industrial
Franklin Street
Kyle.Chaikin@FranklinSt.com
D: 813.559.2009  

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Why Dr. Phillips Inc. plans to raze these buildings near downtown

Excerpted from Orlando Business Journal story.

A developer’s plan to flatten a pair of aging buildings shows confidence in downtown Orlando’s potential future expansion.

Orlando-based Dr. Phillips Inc. — a major real estate company in Central Florida — plans to tear down two 60-plus-year-old buildings at 307 and 315 N. Orange Blossom Trail in Parramore, according to permits filed with the city of Orlando. The developer also plans to redevelop similar older structures as part of the 202-acre, $480 million Packing District near College Park.

For now, Dr. Phillips has no immediate plans for new construction on the Parramore properties. The nonprofit umbrella company Dr. Phillips Charities uses the income produced from its portfolio of rental properties and other investments to fund grant making.

“We saw an opportunity to prepare today for tomorrow,” Ken Robinson, president and CEO for Dr. Phillips Charities, told OBJ. “We continually analyze our properties, and in this case, these properties were older and functionally obsolete.”

Local retail experts say the developer likely is anticipating downtown Orlando’s westward expansion past Interstate 4 and into Parramore. In recent months, companies and developers have been scouting for potential real estate opportunities in the historically segregated and low-income Parramore community. These companies have cited the neighborhood’s momentum from projects such as the construction around the 68-acre, $1.5 billion Creative Village and the Orlando Magic’s planned Sports and Entertainment District.

Office, entertainment and residential developments in Parramore will spur more demand for retail in the area, said Terrence Hart, senior director at Franklin Street of Orlando, who handles retail leasing and is not involved with the two buildings destined for the wrecking ball. Hart said he sees downtown’s western edge eventually growing to John Young Parkway — about 1 mile west of the Dr. Phillips properties. “Retailers actually are starting to take that part seriously. That used to be a no man’s land for retailers.”

For full story, visit https://www.bizjournals.com/orlando/news/2019/10/18/why-dr-phillips-inc-plans-to-raze-these-buildings.html

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Neptune Beach retail center Saltwater Row under development

Excerpted from Jacksonville Business Journal story.

TriBridge Residential and TLM Realty Corp announced plans for a retail and commercial development in Neptune Beach near the Beaches Town Center Monday.

The first phase will include 30,000 square feet of retail on the ground floor with a 44-room boutique hotel above the retail. The development’s first phase will include public courtyards, tree-lined streets and ample parking. Currently in the planning phase, construction on phase one is anticipated to commence in early 2020.

Plans for the second phase include an approximately 150-room upscale hotel from a national brand featuring a custom design to complement Saltwater Row’s architectural style.

“We are thrilled to announce our new and exciting vision for Saltwater Row,” said TriBridge Residential Principal of Development Katherine Mosley. “Our goal is to transform a sluggish plaza into a dynamic shopping and entertainment destination with curated retail, restaurants and hotels, attracting locals and visitors alike.”

Franklin Street Real Estate Services is actively pre-leasing Saltwater Row. The company has letters of intent and lease negotiations underway with several retailers including a brew pub, breakfast-focused café concept, lifestyle and yoga studio, gourmet donut shop, and a local clothing boutique.

For full story, visit https://www.bizjournals.com/jacksonville/news/2019/09/23/neptune-beach-retail-center-saltwater-row-under.html

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Shops, hotel and entertainment space planned for old Kmart site in Neptune Beach

Excerpted from First Coast News story.

NEPTUNE BEACH, Fla. — There are new plans for the lot where the old Kmart sits vacant in Neptune Beach. TriBridge Residential and TLM Realty announced plans Monday for shops and a hotel development called Saltwater Row.

According to developers, the first phase of the project will include space for shops on the ground floor, possibly a cafe, a brewpub and a yoga studio. A 44-room boutique-style hotel is planned for above the shops.

The second phase of the project will include a 150-room upscale hotel, according to the plans.

Some neighbors in the area protested plans before Saltwater Row to build apartments on the property. Residents Monday said they have mixed feelings about this project due to concerns about potential traffic.

“The thing that I don’t particularly like is instead of apartments, we’re getting a hotel and the hotel is going to have much more frequent turnover than the apartments would’ve had,” resident Todd James said.

“Traffic will be a concern,” resident Dina Demarco said. “I imagine that it will get a little bit worse. It’s not too insane here. It gets a little bad. I think more people will come to this area, and I don’t know if that’s necessarily a good or a bad thing.”

Most agreed, though, that anything would be better than the vacant Kmart store.

“Right now, we have that vacant Kmart center that has just been sitting there, so, really, I think getting rid of that and anything there would be an improvement,” Demarco said.

The lot has sat vacant for four years. According to a press release from the developers, the goal “is to transform a sluggish plaza into a dynamic shopping and entertainment destination with curated retail, restaurants and hotels, attracting locals and visitors alike.”

Some residents welcome the possibility of new shops, though. 

“The reason I’m excited about it is I think it’s sorely needed in this area to have some additional retail,” James said.

Demarco said as long as the new space is done right, she’s ok with it.

“I would say as long as it’s a small boutique hotel, I think that’s good for this area,” she said. “If you look at Hotel Palms, that place is great. One Ocean, that place is great. I think that those places do fill up and there’s a need for additional rooms, so I think if it’s done right, it would be a good addition.”

Construction on phase one is set to start in early 2020. The press release also notes Franklin Street Real Estate Services is pre-leasing Saltwater Row and has several letters of intent. 

A representative for the developer wasn’t available for any additional comments. 

For full story, visit https://www.firstcoastnews.com/article/news/local/shops-hotel-and-entertainment-space-planned-for-old-kmart-site-in-neptune-beach/77-5d238a62-b3fa-4f82-8b7a-38295267330c

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Developer announces plan for Saltwater Row in Neptune Beach

Excerpted from News 4 Jax story.

NEPTUNE BEACH, Fla. – A retail, entertainment and hotel center development near Atlantic Boulevard and Third Street — not far from the Beaches Town Center — was announced Monday.

Saltwater Row, which will include public courtyards, tree-lined streets and parking, is the brainchild of TriBridge Residential and TLM Realty Corp. 

“We are thrilled to announce our new and exciting vision for Saltwater Row,” said Katherine Mosley, TriBridge Residential’s principal of development. “Our goal is to transform a sluggish plaza into a dynamic shopping and entertainment destination with curated retail, restaurants and hotels, attracting locals and visitors alike.”

The first phase will include 30,000 square feet of retail on the ground floor with a 44-room boutique hotel above the retail. The development’s first phase will include public courtyards, tree-lined streets and ample parking. Currently in the planning stage, construction on phase one is expected to begin early next year.

Plans for the second phase include an approximately 150-room upscale hotel from a national brand. 

Developers hope Saltwater Row will complement the offerings available in the nearby Beaches Town Center and include local chef-driven concepts, fitness activities, boutique stores and entertainment. 

Franklin Street Real Estate Services is pre-leasing Saltwater Row. The company has letters of intent and lease negotiations underway with several retailers, including a brew pub, breakfast-focused café concept, lifestyle and yoga studio, gourmet donut shop and a local clothing boutique.

For more information, visit www.SaltwaterRow.com.

For full story, visit https://www.news4jax.com/news/developer-announces-plan-for-saltwater-row-in-neptune-beach

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Plans announced for Saltwater Row in Neptune Beach

Excerpted from Action News Jax story.

NEPTUNE BEACH, Fla. – TriBridge Residential and TLM Realty Corp has announced plans for its retail and commercial development in Neptune Beach near the Beaches Town Center. Saltwater Row will be a retail, entertainment and hotel center near Atlantic Boulevard and Third Street.

“We are thrilled to announce our new and exciting vision for Saltwater Row,” Katherine Mosley , TriBridge residential principal of development, said. “Our goal is to transform a sluggish plaza into a dynamic shopping and entertainment destination with curated retail, restaurants and hotels, attracting locals and visitors alike.”

Saltwater Row’s plans are underway. The site is being designed as a destination for community residents and visitors. The first phase will include 30,000 square feet of retail on the first floor with a 44-room boutique hotel above the retail, according to the realtors.

The development’s first phase will include public courtyards, tree-lined streets and ample parking. Currently in the planning phase, construction on phase one is anticipated to commence in early 2020.

Plans for the second phase include an approximately 150-room upscale hotel from a national brand featuring a custom design to complement Saltwater Row’s architectural style.

Franklin Street Real Estate Services is actively pre-leasing Saltwater Row. The company has letters of intent and lease negotiations underway with several retailers, including a brew pub, breakfast-focused café concept, lifestyle and yoga studio, gourmet doughnut shop and a local clothing boutique.

For full story, visit https://www.actionnewsjax.com/news/local/plans-announced-for-saltwater-row-in-neptune-beach/989475903

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6 retailers head to Baldwin Park as its occupancy hits ‘critical mass’

Excerpted from Orlando Business Journal story.

Terrence Hart has turned away retailers from Baldwin Park in recent months.

That’s because the roughly 190,000 square feet of retail space is about 96% leased at the mixed-use development near downtown Orlando. Hart, senior director at Franklin Street of Orlando, handles leasing for Dallas-based landlord Tabani Group along with Senior Associate Tim Rogers.

Hart first started leasing the property in 2016 when retail occupancy was about 80%. Now, he said he can’t squeeze in all the fitness concepts and boutique restaurants that want to open there. The remaining space may host a bridal boutique and computer educational concept.

“It’s become like a Park Avenue or a College Park,” Hart said. “Before, it hadn’t gotten to that point. It hadn’t hit that critical mass of retailers.”

For full story, visit https://www.bizjournals.com/orlando/news/2019/09/12/6-retailers-head-to-baldwin-park-as-its-occupancy.html