Writer: Yolanda Rivas
2 min read October 2019 — The retail sector has remained steady in Orlando over the last few years. Far from affecting physical stores, e-commerce has contributed to the growth of many businesses and the retail market. Crossman & Company is a commercial real estate firm focused on serving retail landlords exclusively throughout the Southeast. CEO John Crossman spoke recently with the Invest: team about the performance of the Orlando and Central Florida retail sector and its latest trends.
What are some trends and advantages of Orlando’s retail sector?
Retail is interesting in that it follows growth from other market sectors. When you look at the real estate industry, typically jobs lead, then housing and then retail. When you look at a market, there are two specific factors to consider in terms of retail performance: the number of people moving and vacationing in the area. If those two numbers are up, then there will probably be an up retail market. In Orlando, those numbers keep going up and the retail market is doing very well. In central Florida, we have healthy demographic growth and a big tourism industry that is making the retail sector substantially bigger. Orlando has one of the highest timeshare markets in the world and the exponential factor of tourist retail is amazing.
There is also what we call “the halo effect,” which happens when an online retailer opens physical stores and, most times, their online sales go up. Similarly, when an online retailer closes physical stores, their online sales go down. When customers buy something online and return it to a physical store, they typically end up spending more money in the store. In the Orlando area, we’re not seeing people radically closing stores. We are seeing a combination between their physical and online presence.
What areas of Orlando are seeing the most demand in retail real estate?
The areas that are closest to the I-4 corridor have typically done well. As more beltways have been added over the years, that has spurred additional growth. Submarkets like Oviedo, Lake Mary, Clermont and Kissimmee have done well, too, due to their proximity to the corridor’s beltways. I don’t think you can talk about Orlando’s retail without talking about Lake Nona. There’s no doubt that that area has a major significance. Retail activity starts with jobs, then residential and retail, and there are numerous jobs and growth in Lake Nona. In the tourism area, some significant deals were closed recently, specifically on International Drive and Disney. Disney Springs and Park Avenue Winter Park are some of the best retail experiences in Orlando.
What are some challenges facing the retail real estate industry in Orlando?
The retail industry overall is doing well. Yet, it’s very dynamic and it can become overwhelming. The industry has significantly changed so much and now is more similar to that old school, post-1950s retail, where retail surrounded a property that was growing up in a certain area. We used to talk about mixed-use developments, but now we have the mixing of uses in developments. Now, you can have a retailer, medical providers, educational institutions, religious organizations and a different mix of tenants in the same place. That makes for healthier retail, but it also can be complicated due to the many dynamics in the same place. Another challenge is technology, augmented reality, and the rapid pace of innovation. We need to get together as an industry to explore the future impact of new technologies in the retail sector.
To learn more about our interviewees, visit:
Crossman & Company: https://www.crossmanco.com/