The Palms at Town & Country, 8268 Mills Drive.
The Palms at Town & Country, 8268 Mills Drive. (J. Albert Diaz)

Investors are closely monitoring the e-commerce industry’s effect on the South Florida retail market. As sales migrate online, retailers are shrinking their footprints while some big-box tenants like Sports Authority have faced bankruptcy, leaving many empty stores in their wake.

“Investors are looking at retail centers or properties and taking into consideration what exposure the tenants have to online sales,” said Barry Wolfe, vice president of investments for Marcus & Millichap in Fort Lauderdale.

While several retailers are using technology to their advantage, others have been hurt.

“Retailers are not growing as aggressively,” Wolfe said. “The developers and lenders are certainly being cautious.”

Wolfe and his team have sold a couple of 100,000-square-foot shopping centers this year, and the properties attracted strong local and international capital. One of the deals, a Coral Springs shopping plaza anchored by a movie theater, sold for nearly $18 million to a buyer from Toronto.

The plaza sold because one, it was stable, and two, it carried with it a strong mix of retail and professional tenants, many of which have undergone recent unit upgrades and renovations.

“Properties that service the local community here are going to continue to do well,” Wolfe added.

Franklin Street is banking on just that.

The Tampa-based real estate company is marketing a 16-asset portfolio in Broward and Palm Beach counties. The portfolio is comprised of small Class B and C unanchored strip centers, which combined total about 115,000 square feet of retail space.

The portfolio will most likely trade for about $22 million at a 6 percent cap rate, said Robert Granda, director of investment sales with Franklin Street in Fort Lauderdale. Within three days, well over 100 investors were eyeing the portfolio.

“It just shows that these type of assets are strong, and they fit the economy very well,” he said.

The e-commerce industry is still in its infancy in his opinion. Retailers are still learning how to converge their online shopping segment with brick-and-mortar operations.

“As it pertains to these types of assets, e-commerce doesn’t really affect them,” he said. “These are mom-and-pop, small business owners that provide a service to the community.”

The centers are almost all fully occupied by tenants such as dry cleaning businesses, medical offices, cellphone and shoe repair stores, and other service-oriented retailers.

Retail Experience

Owners and developers are promptly responding to consumers’ online buying habits by reinventing their properties as leisure and entertainment destinations rather than the traditional store-lined strip center. They are reimagining tenant mixes to provide an experience shoppers can’t get online like sipping coffee at a cafe or checking out a new restaurant with friends.

CBRE Group Inc. released a study showing restaurants are increasingly favorable tenants because they attract foot traffic and keep people around for a longer period of time. CBRE found landlords are making room for nontraditional tenants like professional service providers — emergency care centers, doctors and financial planners — to help increase daily foot traffic.

They are catering to an active consumer population: Floridians are expected to spend nearly 14 percent of their expenditures on food and entertainment this year, nearly twice the national rate, according to CBRE.

“To attract and retain customers, retailers and landlords across the country have embraced ‘placemaking,’ building dynamic and engaging environments that have the ability to inspire and create a sense of place or community,” the CBRE study said.

South Florida’s retail developers are following suit.

“When you think about the fact that you can sit at home and pretty much order anything you want from your computer or handheld … there’s really not a lot of reason to go into a store today,” said Michael Comras, president and CEO of the Comras Co. in Miami Beach.

A three-way partnership between his company, Federal Realty Investment Trust and Grass River Property will redevelop the Shops at Sunset Place in South Miami to better cater to the digitally driven population.

The trio purchased the outdated mall for $110 million last year with plans to essentially turn it inside out. Central to the remake is a “walkable urban center” adorned with apartments, a hotel and street-level retail.

“Sunset Place has always intended to be a cafe-rich, pedestrian-friendly, streetscape venue, and it really should [act as] the living room of the community,” Comras said. “That’s what we’re looking to do.”

He said developers will increasingly look at mixed-use projects when pursuing retail. The addition of residential and hospitality uses at Sunset Place will bring more residents and visitors to South Miami, creating a built-in clientele for area businesses.

Other retail developments, like the $1 billion Brickell City Centre project in Miami’s Brickell district, have created a 24-hour consumer base using the mixed-use format. The project’s two condo towers, two office towers and hotel will feed directly into its shopping mall.

Brickell City Centre will also open a food hall, following a national trend that CBRE says is slowly making its way into Florida’s retail sector.

Bigger Properties

Even Florida’s largest and most successful malls are retrofitting their space to meet escalating consumer demand for an urban, lifestyle-type retail experience.

Aventura Mall, the largest mall in the state and the third-largest in the country, has embarked on a 315,000-square-foot expansion that will offer indoor and outdoor dining experiences, panoramic views and high-end art exhibits. The shopping center’s new space is expected to open next year.

Sawgrass Mills, the second-largest mall in the state, is also expanding The Oasis with streetscape retail and dining before year-end.

One of the year’s largest retail purchases crystallizes the consumer and investor preference for well-performing, open-air, upgraded assets. Houston-based Weingarten Realty, a publicly traded real estate investment trust, poured $285 million into Miami’s West Kendall suburb with its purchase of the 664,000-square-foot The Palms at Town & Country. The open-air shopping plaza sits northeast of Florida’s Turnpike and Kendall Drive — two high-traffic roadways serving more than 200,000 vehicles per day.

The deal closed this summer, and it wasn’t Weingarten’s first big-dollar buy in South Florida.

In May, the Texas company paid almost $93 million for the 180-acre Deerfield Beach Mall, which was renovated in 2009.

Investors are closely monitoring the e-commerce industry’s effect on the South Florida retail market. As sales migrate online, retailers are shrinking their footprints while some big-box tenants like Sports Authority have faced bankruptcy, leaving many empty stores in their wake.

“Investors are looking at retail centers or properties and taking into consideration what exposure the tenants have to online sales,” said Barry Wolfe, vice president of investments for Marcus & Millichap in Fort Lauderdale.

While several retailers are using technology to their advantage, others have been hurt.

“Retailers are not growing as aggressively,” Wolfe said. “The developers and lenders are certainly being cautious.”

Wolfe and his team have sold a couple of 100,000-square-foot shopping centers this year, and the properties attracted strong local and international capital. One of the deals, a Coral Springs shopping plaza anchored by a movie theater, sold for nearly $18 million to a buyer from Toronto.

The plaza sold because one, it was stable, and two, it carried with it a strong mix of retail and professional tenants, many of which have undergone recent unit upgrades and renovations.

“Properties that service the local community here are going to continue to do well,” Wolfe added.

Franklin Street is banking on just that.

The Tampa-based real estate company is marketing a 16-asset portfolio in Broward and Palm Beach counties. The portfolio is comprised of small Class B and C unanchored strip centers, which combined total about 115,000 square feet of retail space.

The portfolio will most likely trade for about $22 million at a 6 percent cap rate, said Robert Granda, director of investment sales with Franklin Street in Fort Lauderdale. Within three days, well over 100 investors were eyeing the portfolio.

“It just shows that these type of assets are strong, and they fit the economy very well,” he said.

The e-commerce industry is still in its infancy in his opinion. Retailers are still learning how to converge their online shopping segment with brick-and-mortar operations.

“As it pertains to these types of assets, e-commerce doesn’t really affect them,” he said. “These are mom-and-pop, small business owners that provide a service to the community.”

The centers are almost all fully occupied by tenants such as dry cleaning businesses, medical offices, cellphone and shoe repair stores, and other service-oriented retailers.

Retail Experience

Owners and developers are promptly responding to consumers’ online buying habits by reinventing their properties as leisure and entertainment destinations rather than the traditional store-lined strip center. They are reimagining tenant mixes to provide an experience shoppers can’t get online like sipping coffee at a cafe or checking out a new restaurant with friends.

CBRE Group Inc. released a study showing restaurants are increasingly favorable tenants because they attract foot traffic and keep people around for a longer period of time. CBRE found landlords are making room for nontraditional tenants like professional service providers — emergency care centers, doctors and financial planners — to help increase daily foot traffic.

They are catering to an active consumer population: Floridians are expected to spend nearly 14 percent of their expenditures on food and entertainment this year, nearly twice the national rate, according to CBRE.

“To attract and retain customers, retailers and landlords across the country have embraced ‘placemaking,’ building dynamic and engaging environments that have the ability to inspire and create a sense of place or community,” the CBRE study said.

South Florida’s retail developers are following suit.

“When you think about the fact that you can sit at home and pretty much order anything you want from your computer or handheld … there’s really not a lot of reason to go into a store today,” said Michael Comras, president and CEO of the Comras Co. in Miami Beach.

A three-way partnership between his company, Federal Realty Investment Trust and Grass River Property will redevelop the Shops at Sunset Place in South Miami to better cater to the digitally driven population.

The trio purchased the outdated mall for $110 million last year with plans to essentially turn it inside out. Central to the remake is a “walkable urban center” adorned with apartments, a hotel and street-level retail.

“Sunset Place has always intended to be a cafe-rich, pedestrian-friendly, streetscape venue, and it really should [act as] the living room of the community,” Comras said. “That’s what we’re looking to do.”

He said developers will increasingly look at mixed-use projects when pursuing retail. The addition of residential and hospitality uses at Sunset Place will bring more residents and visitors to South Miami, creating a built-in clientele for area businesses.

Other retail developments, like the $1 billion Brickell City Centre project in Miami’s Brickell district, have created a 24-hour consumer base using the mixed-use format. The project’s two condo towers, two office towers and hotel will feed directly into its shopping mall.

Brickell City Centre will also open a food hall, following a national trend that CBRE says is slowly making its way into Florida’s retail sector.

Bigger Properties

Even Florida’s largest and most successful malls are retrofitting their space to meet escalating consumer demand for an urban, lifestyle-type retail experience.

Aventura Mall, the largest mall in the state and the third-largest in the country, has embarked on a 315,000-square-foot expansion that will offer indoor and outdoor dining experiences, panoramic views and high-end art exhibits. The shopping center’s new space is expected to open next year.

Sawgrass Mills, the second-largest mall in the state, is also expanding The Oasis with streetscape retail and dining before year-end.

One of the year’s largest retail purchases crystallizes the consumer and investor preference for well-performing, open-air, upgraded assets. Houston-based Weingarten Realty, a publicly traded real estate investment trust, poured $285 million into Miami’s West Kendall suburb with its purchase of the 664,000-square-foot The Palms at Town & Country. The open-air shopping plaza sits northeast of Florida’s Turnpike and Kendall Drive — two high-traffic roadways serving more than 200,000 vehicles per day.

The deal closed this summer, and it wasn’t Weingarten’s first big-dollar buy in South Florida.

In May, the Texas company paid almost $93 million for the 180-acre Deerfield Beach Mall, which was renovated in 2009.