Broward’s retail market remains relatively unscathed. That is expected to change
The Broward retail market remains relatively untouched from the pandemic, according to a new study. Its saving grace? Government aid.
Since the first quarter, average occupancy rates have dropped by 0.3% for outdoor shopping centers with over 20,000 square feet, according to a July retail report published by 11th St. Capital. The report by the Boca Raton-based real estate investment and management firm found that total occupancy at the 600 outdoor shopping centers in Broward dipped from 89.1% in the first quarter 2020 to 88.8% in July 2020.
“We’ve kicked the can down the road,” said Joshua Ladle, the founder and CEO of 11st St. Capital. “The retail market is being propped up by government assistance.’’
But that likely won’t last, he said. “When you take the braces away, the market is not going to be as stable. The economy is not going to come on as a light switch and these businesses will still have bills to pay.”
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Publix is still the secret to a successful shopping center. The occupancy rate averaged 92% for shopping centers with a Publix anchor versus 88.8% for those without a Publix branch in July 2020, according to Ladle.
“These anchor tenants draw shoppers and that’s going to impact the dry cleaner or nail salon at the center. These shoppers have other needs and, for convenience sake, they might as well get them done at the same shopping center,” Ladle said.
The market also experienced a positive net absorption with big-box tenants. Three big-box tenants, including two Save-a-Lots and one 24-Hour Fitness, exited the market, while nine big-box tenants entered. They included Burlington, TJ Maxx, Ross Dress for Less, Presidente Supermarket, Aldi and Whole Foods.
“These deals were probably in the works for months. It will be telling if in six-to-12 months from now we see more big-box tenants, because now is when those retailers would be signing leases.”
