Liberty in the News
Galvin: The economy hasn’t made buyers less picky, just more cautious
November 04, 2010
Twenty-six-year commercial real estate veteran Janet Galvin said there’s one constant when it comes to the wants of her clients, despite the slow economy — location remains key.
This remains true even though prime locations are harder to find these days, said Galvin, partner at Orlando-based Liberty Universal Management Inc. who specializes in representing retail tenants. “They still want great locations with good co-tenancy, exposure, traffic, etc., but at much lower costs.”
However, some changes made in this economy include how retailers handle business. “Many retailers have outsourced real estate, which has increased business for brokerage and management firms,” said Galvin, who typically works 50 hours a week. “It also puts retailers in a great position as their economic situations get better.”
Liberty Universal Management, which has three employees and four agents and was founded in 1990, leases and manages more than 1.4 million square feet. It remains a boutique, independently owned firm. But it has gained a national presence by partnering with the Retail Brokers Network.
Companies looking for retail space here: We’re seeing a lot of restaurants and retailers, such as Hobby Lobby and Dick’s Sporting Goods, which are taking advantage of the opportunities in the market. Many are leasing locations they could not have gotten into before. Additionally, discount retailers such as Dollar General, Dollar Tree, Aldi, etc., have gained acceptance from higher income customers andare expanding rapidly as consumers continue to look for value.
The type of retail space selling or leasing the best right now: A-plus locations are always sought after and are harder to find these days. Class C centers are doing well because discount retailers and discount grocers are expanding.
Where I’m seeing the most retail space activity: Waterford Lakes, Lake Mary, Winter Park and Dr. Phillips are consistently strong markets. Clermont also is attracting a lot of new tenants.
The least: I have seen a lot of vacancy in the West Colonial/50 corridor, with not much interest from tenants.
On whether it’s taking longer to get deals finalized: Absolutely. Both landlords and tenants are looking at every deal in much more detail. All criteria set by tenants have to be met today rather than a majority, as in the past. Landlords are taking a harder look at credit, co-tenancy clauses, percentage rent and lease terms. Landlords will continue to focus on increasing occupancy levels through discounted lease rates and concessions.
When I think we’ll see more retail development: Construction activity will continue to be slow for a few years, with the bulk of new centers being neighborhood grocery-anchored with fewer local stores attached. Wal-Mart and Target still are expanding with smaller store prototypes.
Successful brokers in the market need: Networking, more networking, patience and luck.
The overall retail occupancy rate in metro Orlando: It’s currently about 9.5 percent, a slight increase from last year. The overall retail vacancy rate for U.S. markets is approximately 11 percent.
How I feel Orlando’s commercial real estate sector is doing now: There have been signs of recovery, but most landlords have had to discount rent and offer special incentives to get deals done. We hope that by the end of 2010,vacancies begin to level off and we will see signs of recovery in 2011.