The Shopping Centers Group (TSCG) is not sleeping on the growth of the South Florida retail market.
The retail brokerage expands its already large business in Florida with the acquisition of the Southeast Distribution Group (SRG), which TSCG says will help it exploit profit opportunities in Florida, where up to 1,000 people move every day.
SRG’s 12-member team will be integrated into TCSG and bring with it more than 50 new retail and restaurant customers. The move will increase TCSG’s leased space by approximately 7.5 million square feet and its property under management by an additional 400,000 square feet.
“This will result in an even more formidable full-service real estate business that stretches from Florida’s southernmost beach to the financial and cultural epicenter of the United States – New York City,” David Birnbreyco-CEO of TSCG, said in a statement.
SRG was founded in 2016. Its founders and managing partners will hold leadership positions in the combined company and bring with them clients such as Chipotle, Kimco, IT’S OKAY and Habit burger. Jeremy Kral will now serve as Executive Vice President while Dana Dowset and Eric Battstone are vice-presidents of the TSCG.
“Our success comes from our focus on client business goals and strategy, not specific transactions. Joining TSCG places us at the highest level in our industry,” Kral said in a statement.
Physical retailers fell on hard times when COVID-19 brought its wrath to the United States in March 2020, leading to an increase in e-commerce which led to low vacancy rates in the industrial real estate marketbut higher vacancy rates for traditional trade.
Now inflation has entered the chat.
In April, the United States Census Bureau released sales figures in March illustrating that retail deals failed to pick up steam. There was a minimal 0.5% monthly increase in sales from February gains of 0.8% and January gains of 5.1%. according to Forbes. During this time, the US Bureau of Labor Statistics reported in April that the consumer price index (CPI) rose 8.5% for the 12 months ending March 2022, marking the largest 12-month increase since the period ending December 1981.
Inflation also hurt e-commerce businesses, which accounted for 15.2% of total retail sales in January. In February, that number fell to 14.6%, showing the steady decline in online sales since the start of 2022, Forbes reported. The difference appears to be catching up in discount stores, where sales rose 6.6% in April.
While retail in Florida has certainly been impacted by inflation, it is in a better position than many other markets due to its above average performance during COVID.
There were fewer empty stores in Florida as vacancy rates held steady at 3.7% in Miami-Dade County, according to a report by Necklaces in the first quarter of 2022. Broward County over the same period posted a vacancy rate of 4.7%, down from 5.6% in the first quarter of 2021.
Marc Hallum can be contacted at [email protected].