Two fast-growing Florida cities, Jacksonville and Bonita Springs, are nearing the critical 1 million population mass that beckons national retailers. Simon Property Group plans to make the first big splash, with two new open-air town centers over the next two years, ensuring the retail giant's foothold in both growing markets.
Simon, in partnership with Atlanta-based developer Ben Carter Properties LLC, is building St. Johns Town Center, a mixed-use lifestyle project with 450 residential units, two hotels, and about 1.5 million square feet of retail space, restaurants and entertainment venues on 200 acres in Jacksonville.
Also, in conjunction with St. Charles, Ill.-based Oakbrook Properties, Simon has broken ground on Coconut Point, a 500-acre mixed-use community in Bonita Springs, Fla., about a half-hour south of Ft. Myers and just north of Naples. This mixed-use project will ultimately have 1.8-million square feet of retail, 300,000 square feet of office space, 1,200 residences and 600 hotel rooms. Simon is building the project's town center on a 166-acre site, which involves three distinct retail components totaling 1.2 million square feet of retail space, 90,000 square feet of office condominiums, 200 to 400 residential units, and one or two hotels.
Although Cleveland-based Richard E. Jacobs Group is building the 2 million- to 3 million-square-foot Gulf Coast Town Center about 15 miles from Simon's Coconut Point, CB Richard Ellis Managing Partner Larry Foster says he is not concerned about oversaturation, though he expects vacancy to escalate temporarily with so much space hitting the market simultaneously. Noting that cap rates for grocery-anchored centers are in the 7 percent and sub-7 percent range, Foster says that quality retail space is in such high demand “there's a buyer frenzy down here anytime anything goes to market.”
Exploding Markets
“Jacksonville is expanding, and the bubble is about to explode. I haven't seen anything like this since the mid-70s in Boca Raton,” says Jim Brady, senior investment advisor for Sperry Van Ness-Walsh Enterprises in Jacksonville. Furthermore, St. Johns County is anticipating a surge in population growth with completion of the Interstate-295 beltway around Jacksonville. “About 50,000 new homes have been permitted over the last few years,” he says, noting that home prices have doubled or tripled in three years in St. johns County.
Foster, who is based in the Ft. Myers office, says that retail development there is being driven by an influx of aging adults from the northeast, who are nearing retirement age.
Phase I of St. Johns Town Center, which will open October 2005, includes 1.1 million square feet of commercial space, as well as 450 residential units and a hotel. Four eateries, including P.F. Chang's and Cheesecake Factory, are also included. The center will use architecture to separate its components, with the power center designed in Georgian style popular along Florida's coast, the restaurant and entertainment district reminiscent of downtown Jacksonville in the early 20th Century, and the village center designed around a Spanish theme. The town center district will feature storefront parking and tree-lined streets.
Coconut Point, built in Mediterranean-style architecture, will feature three districts, the Town Center, the Lakefront and the Village. Phase I of this project, also opening in October 2005, includes pieces of the total pie — big boxes, upscale retail, restaurants, office, residential and hotels. Sears Grand will anchor the Community Center; Dillard's Barnes & Noble and a 20-plex Muvico theater will anchor the Village; and a variety of eateries set around a eight-acre lake and park area, with a performance area, will comprise the Lakefront district.
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The combined population of Jacksonville's Duval (Jacksonville) and St. Johns counties is expected to reach 1.1 million by 2005, up from 775,000 in 1990.
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The tri-county area of Charlotte, Collier and Lee counties, which comprise Coconut Point's market, is expected to total 900,000 residents by 2005, up from about 600,000 in 1990.