Retail development has long been governed by one key principle: location, location location.
Access to dense areas of population and accessibility from primary transportation arteries was critical to a center’s success, and nowhere was this need more acute than for regional malls. But with time comes change, and consumer preferences were already shifting away from enclosed retail centers prior to the pandemic.
In fact, there haven’t been any significant enclosed mall projects completed in Florida in more than 20 years, and with the average retail property built within the past five years averaging 12,535 square feet, there is a substantial amount of underutilized retail space that developers will be eyeing more closely in the years ahead.
With consumer interest in aging mall stock declining, coupled with nation-leading population growth in Florida, it is likely there will be an uptick in the number of mall properties being redeveloped in whole, or in part, as multifamily projects. In many cases, retail will no longer be the highest and best use of the land, and the parking fields and proximity to major transportation arteries naturally cause some sites to be ideal for multifamily development.
This trend is already playing out in Central Florida, where there are three redevelopment projects in play from Daytona Beach to suburban areas in Seminole County, and they all involve Macy’s anchor boxes. Development plans have been announced to convert former Macy’s stores in Seminole Towne Center, Oviedo Mall and Volusia Square Mall to apartments, collectively adding more than 1,000 additional units to the market’s already-robust multifamily construction pipeline.
Rhode Island-based development company Picerne Real Estate Group has announced its intentions to construct a 350-unit apartment complex on a 17.5-acre site that currently houses an empty big-box site for the department store, a property for which Sanford’s city council approved a re-plat earlier this month to facilitate the eventual redevelopment of the site. The former Sears store there has already been occupied by a family entertainment concept, and the addition of a multifamily component is expected to reinvigorate activity at the struggling mall. Foot traffic had been falling at the mall long before its previous owner, Washington Prime Group, staved off foreclosure by transferring the deed to New York-based Kohan Retail Investment Group.
In Oviedo, a Tampa-based developer plans to move forward with replacing the Macy’s store at Oviedo Mall with more than 400 high-end apartments that are being touted as luxury units. Macy’s closed its location there in 2017, and Oviedo's city council approved an amendment allowing for 425 apartments without any age restrictions, replacing a previous approval requiring that 175 total apartments be senior living units. Construction on the project could begin during the first half of 2023.
A little to the north, a former Macy’s location in Daytona Beach’s Volusia Square Mall that closed in 2021 is also the site of plans that could breathe new life into the mall. Multifamily developer Legacy Partners is seeking to redevelop the existing anchor spot and part of the parking lot into roughly 350 apartments with direct access from International Speedway Boulevard. The rest of the mall will remain intact, providing adjacent retail and restaurant opportunities for the new residents.
Another major redevelopment project is planned on the site of the Orlando Fashion Square Mall, but several hurdles still need to be cleared before that project can begin to move forward.
Large-scale redevelopment projects are also planned at Fort Lauderdale’s Galleria Mall and the Southland Mall in the Cutler Bay area of Miami, but the Macy’s anchor boxes there are expected to remain intact. More than 6,000 new apartment units are planned between those two malls.
The Galleria previously lost Lord & Taylor, Saks and Neiman Marcus, but New York-based Keystone-Florida Property Holding Corp., the owner of the mall, plans to incorporate the existing Macy’s and Dillard’s stores into the final redevelopment that will turn the regional mall into a mixed-use center with roughly 1,900 apartments.
The Southland Mall in Cutler Bay is expected to be the site of a $1 billion redevelopment that will add more than 4,300 market-rate apartments, however, the mall and its existing anchors will be kept intact while development takes place in the parking field. Miami-based BH Group and its partner Electra America acquired the 80-acre mall property for just over $100 million in May 2022 in a deal that included the Macy’s store but not the Sears store. To be developed over a seven-year timeframe, the property is expected to be renamed Southplace City Center and will incorporate medical office space, more retail and restaurant space on outparcels, and a 150-room hotel.
