Tampa Bay leads Florida in Retail Sales Volume
The Tampa Bay retail market has recorded roughly $1.1 billion in sales volume over the trailing 12-month period, making it the top market in Florida for retail investment. The next closest is Miami, with approximately $1 billion.
The vast majority of retail transactions have been on the smaller side. In fact, there have only been a dozen or so transactions over $10 million, many of which were multi-property sales. The largest single-property sale was a $23 million transaction, roughly $200 per square foot, of a Home Depot along Gulf to Bay Boulevard in Clearwater.
Retail sales activity is now more in line with pre-pandemic norms but is a far cry from the historic highs hit in 2021 and 2022. In both years, the Tampa Bay market saw over $1.8 billion in retail sales volume.
Much of that was due to the makeup and sheer number of transactions driven by historically low interest rates. Roughly 1,000 sales were recorded in both 2021 and 2022, compared to under 700 over the past year. In addition, there were significantly more large-scale transactions, including several power centers.
The largest single-property trade between 2021 and 2022 was the sale of Pasadena Shopping Center for $33 million or approximately $200 per square foot. The center is anchored by Walmart Neighborhood Market, Bealls Outlet and Ace Hardware.
Private investors have dominated the under-$10 million market in Tampa Bay, accounting for 75% of buyers over the past year. Single-tenant, triple net investments make up the bulk of transactions at this price range, with several gas stations, pharmacies and fast-food restaurants trading over the past year.
For instance, a Miami-based private investor purchased a recently completed Chick-fil-A in Riverview for $3.45 million, equating to roughly $690 per square foot, in October. The property was on the market for less than three months and traded at a 4.5% capitalization rate.
While not particularly noteworthy based on pricing, one of Tampa Bay’s more significant retail sales transactions occurred this year. Washington Property Group, WPG, purchased the Macy’s at Westshore Plaza for $10 million or $45 per square foot, in October.
That was the final piece that WPG needed to control to start the redevelopment of Westshore Plaza. WPG plans to demolish most of the existing mall. Afterward, it will build 900,000 square feet of retail space in conjunction with office space, a medical office center, a hotel and 1,700 apartments.
Tampa Bay will likely continue to be a top retail investment market over the near term. The market has maintained a sub-4% availability rate over the past two years, and the construction pipeline is at a decade-low. Retailers typically must build their buildings in order to break into the market, and those new buildings normally trade immediately after those tenants take occupancy.
In fact, there have been roughly 40 transactions of properties that are less than two years old. These have an average sale price of $3.9 million, compared to $2.3 million for properties built before 2023.
(CoStar Analytics | By Michelle Rumore)
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