Retail development, redevelopment percolate in Boca Raton
Development and redevelopment are thriving in Boca Raton’s retail real estate sector, as population influx and a vigorous economy provide a boost.
“Retail in South Florida is all on the upswing,” Gregory Masin, senior director of retail services for Cushman Wakefield in Miami, told The Real Deal. “There’s continued population growth, strong economic indicators and a lack of development for many years, which has allowed supply to be almost fully absorbed. Now there are new strategic developments in areas of high demand.”
Boca Raton‘s retail vacancy rate totaled just 5.1 percent in the third quarter, compared to 7.2 percent for the county as a whole, according to CBRE. And the average asking rental rate stood at $30.28 per square foot in Boca, more than 50 percent above the $19.69 level for Palm Beach County as a whole.
Redevelopment is actually more common than development in Boca Raton, because “it’s not easy to build,” Russell Bornstein, senior vice president at CBRE in Boca Raton, told TRD. “Land is expensive, so there’s not much available.”
Fifth Avenue Shops, at 1968 Northeast Fifth Avenue, recently replaced its Publix grocery store — reportedly the first in the city when it was built in 1961 — with a new, bigger version. And Walmart last year re-opened a store it vacated several years earlier at Palmetto Park Road and State Route 7 (22100 South State Road 7).
As for new development, the 64,000-square-foot shopping center Park Place by Boca Raton-based Schmier & Feurring Properties is scheduled to open next year on Military Trail, south of Clint Moore Road and Office Depot’s corporate headquarters (5540-5590 North Military Trail). The center will include a Fresh Market grocery store and the restaurants Habit Burger, Chipotle and Burton’s Grill. Other occupants include Raw Juice, a Boca Raton-based fresh juice and vegan food restaurant; Phenomenon, a nitrogen-based ice cream parlor; and Rappy’s Deli, a new concept from famed South Florida restaurateur Burt Rapoport, who also owns Apeiro Kitchen & Bar in Delray Beach and Midtown Miami.
It’s not surprising that the center would focus on food, Masin said. “There is very strong demand for high quality food services — grocery stores and restaurants,” he said. “There’s not demand for hundreds of thousands of square feet for soft and hard goods. That’s mostly in the Town Center [at Boca Raton] mall.”
The sweet spot of retail development in Boca Raton is east of I-95, thanks to growth there in the residential sector, Bornstein said. “The area of most interest is the urban core downtown: Palmetto Park Road to Camino Real along Federal Highway.”
The strength of Boca’s retail real estate sector was strongly underlined by September’s $80.5 million sale of the University Commons shopping center at 1400 Glades Road, just east of I-95. Regency Centers Corp. bought the center from an affiliate of Schmier & Furring. “That shows there’s an exit strategy for developers,” Bornstein said. “There’s a buyer for everything.”
He expects the retail sector’s strength to continue in Boca. “There are roughly 900 people moving into Florida per day, many of them to South Florida,” Bornstein noted. “At long as this continues, Boca has nowhere to go but up.”