Chris Morgan Talks Jacksonville Retail Market
Chris Morgan was interviewed by Derek Giliam with the Jacksonville Business Journal about the future of the retail market in Jacksonville. Here is the story…
While retail closings have dominated the national news cycle this year, Morgan is not worried about the headlines. He sat down with the Jacksonville Business Journal to discuss the health of retail markets along the First Coast.
News headlines have been dominated by a retail Armageddon, but is that the real story in retail these days? If not, then what is?
We believe that there will continue to be a kind of retail equilibrium established over the next few years. Certain brick & mortar and more traditional retailers are faced with having to adjust their overall real estate strategy to be in line with the needs and demands of their customers. On a more macro level, e-commerce will continue to have an impact on retailers as products are purchased on line, those retailers that can utilize e-commerce and embrace it as a compliment to their physical locations, should be fine. The key is having a product selection with a shopping experience that is desirable and unique that you can’t replicate by sitting in front of a computer or from ordering on a hand held device. An example would be Organic grocery stores offering locally sourced products that are unique to the area. Also, there are multiple restaurant concepts that provide special menu items and a true dining experience for their customer. Ultimately, people are social beings, human nature dictates that we get out and see other people and engage the five senses, retail will always need to adapt and people will continue to participate in shopping and dining experiences that are meeting their desire for an overall experience.
What has it been like finding tenants to come to Jacksonville?
I have to give a lot of credit to our brokerage team at Cantrell & Morgan. Without sounding overly biased, I truly believe we have assembled the best of the best in the commercial brokerage community. Our team has taken the rifle approach with retailers and not a shot gun one. In today’s environment, we have to be able to understand what makes the site work with a tenant’s specific requirements. You can’t assume the same strategy for a similar retail group, they can be very unique in how they look at real estate. It is paramount that we do our homework on the front end so we are not wasting a tenant’s resources or ours. Typically, Jacksonville is not the first location a tenant looks in Florida. A lot of our retail relationships started outside of North Florida and then progressed to here. There is no question that Jacksonville is on the national radar with the tangible success of multiple retailers the information is out there for consumption. Based on the recent success of retail development projects and new tenants, we should see the trend of new retailers coming to Jacksonville after their initial entry into a Miami, Tampa or an Orlando market.
You guys are involved in multiple projects around the St. Johns Town Center. What’s happening at those projects?
As most folks in Jacksonville have been looking out their car window and seeing construction, a lot is certainly going on in the Town Center sub-market. This has really become the hub for all types of activity and a live, work, and play environment. What you are seeing is a reaction to the market and demand generators. The reason you have a lot of new restaurant and retail activity is because there was tremendous demand for it. I think the new flags will be very well received along with the big-box retailers like PGA Superstore, Hobby Lobby, and 2nd & Charles. In addition, new hotel and multi-family projects are strategically located within the trade area and are meeting a different kind of need. We are very encouraged with the response from different types of users and the need for more complimentary retail. As more and more office and residential developments are being absorbed around Town Center, there will be a need to provide different types of services to those consumers.
What are the main factors driving this submarket and are there other areas in Northeast Florida that may present similar opportunities?
The Town Center trade area is dynamic in every way. There is a tremendous daytime population with millions of square feet of office in all directions. The residential communities in the area have great demographics with disposable incomes, with many more units coming on line. Generally, people who live near the Town Center are drawn to this type of location because of the proximity to their office, shopping, dining, and entertainment. You are 15 minutes to downtown and less than that to the beaches. You have I-295 connecting other major sub markets north and south as well as Butler Boulevard connecting east and west. If you wanted to define a hub of activity, the Town Center area checks all of the boxes. That said, we do see other submarkets with similar characteristics and opportunities. For example, we have seen a tremendous amount of interest and success at River City Marketplace, numerous retail and restaurant tenants are doing well and we believe more are coming with the UF Health expansion and a new apartment project underway. Additionally, with the residential expansion and growth in St. Johns County and southern Duval, places like Bartram Park, Durbin, Nocatee and World Golf Village have had a lot of interest by different types of retailers and services. It is somewhat logical and linear in nature that as the population shifts south, more and more people will want to work and shop near their homes to maintain their quality of life,these particular areas should be positioned well for future commercial development.
Forecast for the future?
From a local perspective, we believe in Jacksonville and in North Florida. We have the privilege to experience on a daily basis what makes this a great place to live, work and raise a family. It is hard to imagine a scenario where Jacksonville doesn’t continue some form of growth based on our geographical location, our cost of living, an educated work force, recreational opportunities,and an overall sense of community. Specifically, our employment base is strong and growing, we have great schools and universities, strategic public-private partnerships that are being forged, as well as a local and state government that has created a positive environment that encourages and welcomes new employers and businesses. Those factors should continue to converge and formulate sustainable growth for the Jacksonville MSA.