Collier County Retail Space Readily Absorbed

According to recent data gathered within the Collier County/Bonita Springs area, vacancy rates for retail space are low. This can be attributed in part to the healthy economy that the entire country is currently experiencing. But it is more due to the fact that there are not as many options in Collier County for retail space to be established, unlike the situation in Lee County, where there are more acceptable options in various areas.

As one drives down the US 41 Trail, it is obvious there isn't much space open for new retail centers. In addition, none of the current centers are experiencing chronic vacancies. Centers that may have previously experienced higher vacancy rates have since been refurbished and are now enjoying 95 to 100 percent occupancy, as in the cases of Bed Bath and Beyond Plaza, Noodles Plaza and Moorings Plaza.

Retail properties, or plazas, are identified as one of six basic types of centers, according to the 1998 Urban Land Institute guide Dollars & Cents of Shopping Centers:

Convenience - traditionally containing a minimum of three stores with a total gross leasable area (GLA) of up to 30,000 square feet. (Example: River Reach Plaza);

Neighborhood - traditionally built around a supermarket as the principal tenant and typically containing a GLA of about 60,000 square feet. (Example: Kings Lake Square, RiverChase);

Community - traditionally built around a junior department store, variety store, super drugstore, or discount department store as the major tenant, in addition to a supermarket; typical size is about 150,000 square feet GLA, but may range from 100,000 to 500,000 square feet. (Example: Pine Ridge Crossing);

Power - traditionally contains at least four category-specific, off-price anchors of 20,000 square feet or more, typically occupying 85 percent or more of the total GLA (Example: Carillon Center);

Regional - traditionally built around one or two full-line department stores of generally not less than 50,000 square feet with a typical size of about 500,000 square feet GLA. May range from 250,000 to more than 900,000 square feet. (Example: Waterside Shops)

Super Regional - traditionally built around three or more full-line department stores generally of not less than 75,000 square feet each with a typical size of about one million square feet GLA. Sizes range from about 500,000 to more than 1.5 million square feet. (Example: Coastland Center).

Seventy-eight percent of the 455 total retail centers located in the Collier County/Bonita Springs area appear to be fully occupied with many new neighborhood and community type centers currently under construction. This demonstrates that the demand for retail space is currently strong.

Within Southwest Florida, there are 11 new retail plazas under construction totaling approximately 550,000 square feet of rentable space. Seven of these 11 plazas are being built in the North Naples and Bonita Springs area, indicating that most of the growth is north bound. This northern development continues to evolve in layers in direct response to the increased residential growth with banks, food centers, home improvement and supply establishments appearing first in these areas.

Highlands Plaza, for example, is a relatively new center that currently includes a patio store, kitchen supply outlet and a California Closets store as tenants. Another example of a recently developed project to the north is The Promenade. This upscale center features high-end restaurants, boutiques and other retailers.

Two new convenience center projects are on the books for the north end of the county. One is located off Immokalee Road near RiverChase and Collier's Reserve, while the other is located at the Collier/Lee County line adjacent to Sterling Oaks. Both of these centers will have upwards of 30,000 square feet with a tenant mix focused on service and convenience merchants.

Although surprising, another example of increased roof tops creating a demand for retail centers is occurring along State Road 951, just off of I-75. What was long thought to be the end of the earth, the area heading west toward Marco Island has seen increased activity with national brand names including Publix and Walgreens vying for space. A number of banking institutions have shown interest in this area, which once again is typical considering the number of new residential projects slated for that locale.

Tamiami Trail is still the grand-daddy of retail businesses in Naples, but other corridors which funnel onto it are increasing in popularity due to the lack of vacancies and rising costs of this main artery. Currently, the strongest area for retail businesses starts at Coastland Center and extends north to Vanderbilt Road. In the near future, that stretch is expected to extend further north to Immokalee Road, and eventually become a straight path into Bonita Springs.

Activity on Immokalee Road is also currently healthy and should continue to grow over the next five years, considering that this area is the strongest residential corridor at present. Developers, including Hardy Development and the nation's largest commercial name, Benderson Development, have plans for projects there.

In South Naples, 5th Avenue and 3rd Street continue to see increased activity with high-end retail establishments gobbling up vacancies as that area continues its recent redevelopment efforts. Developers would like to see this area evolve into the Los Olas/Worth Avenue of the West Coast. Already we are seeing rental rates turning heads with numbers climbing into the $40 per square foot area. Will a Tiffany's or Gucci appear in this area one day? It's hard to sketch a time-line for future development, but it's not out of the question. Larger upscale department stores like Neimann Marcus and Nordstroms are already looking at making a presence in Naples.

East Tamiami Trail is worth keeping an eye on. Within the last 10 to 15 years, this area has seen little to no growth. However, as road improvements near completion, we could see resurgence in new development activity given the availability of raw land in this area as opposed to the scarcity in the north.

In Your Face

A recent trend by national and regional retailers has been an "in your face" location approach. Rather than being tucked back into an in-line center, retailers prefer freestanding locations that feature excellent visibility following the examples set by drug chains including Walgreens and Eckerd Drugs.

Collier County will also continue to see national retailers and restaurants that have already or are currently establishing their presence in Fort Myers eventually move into Naples. This is a natural and obvious progression once these companies experience a positive response in one neighboring locale. It wouldn't be surprising to see popular chain restaurants like Hops B