Wish You Were Here?
Aug 1, 2004 12:00 PM, John Crossman is senior vice president of Trammell Crow Co.'s retail investment division in Orlando,
Florida is a hothouse for the various trends currently influencing retail real estate development nationwide. Explosive growth in customer volume is spurring new development, while the rise in domestic tourism and the changing face of “retirement” are particularly apparent in the state.
Demographic studies show that for the next 10 years, 250,000 to 300,000 people will move to Florida annually. That breaks down to 1,200 new people a week in Central Florida alone. Since it takes about 30,000 people to support a typical grocery store, statistics indicate 25 to 30 new grocery stores will be developed each year in Florida for the next decade, just to keep up with growth.
In Central Florida, we project at least one new grocery-anchored retail center will be developed every nine weeks to keep pace with demand. That's a rather significant level.
Tourism studies reveal a similar pattern. Florida's tourism industry is experiencing a huge resurgence that may get even bigger in the months ahead. We saw a significant drop after September 11, 2001, but all indications show a full recovery from that decline. And as terrorism fears around the world worsen, it appears likely that more Americans will choose domestic travel over international tourism. That means millions more will choose Florida for their family vacations.
Baby boomers are another major force in Florida retail. As the generation reaches retirement age, we are seeing more Americans retire earlier and live longer. A generation ago, it was common to retire at age 65 and the average life expectancy was about 73 years. Today, many more people retire at age 55, and life expectancy is stretching into the 80s and 90s. That means that during the next decade or two, a huge portion of Americans will spend 30-40 years in “retirement.” A generation ago, retirement meant lazy days fishing or playing golf. Today, retirement is far more active. So active, in fact, that it's changing the definition of retirement. The key trend is the number and frequency of retail experiences these ‘retirees” enjoy. Whereas retirees used to dine out about two times per week on average, today that number may be as high as four or five times.
In such a high growth state as Florida, tremendous demand for retail development exists. That demand will continue, and retailers and developers that capitalize on the booming demand for groceries, increased leisure time for retirees and the rise in number of tourists will be the most successful in Florida.
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