Lakewood Ranch commercial corridor to grow with Benderson mall

Staff WritersNovember 20, 2012 

Editor's Note: This is the third in a three-part series of stories on the expected future growth of East Manatee and its impact on residents and businesses.

By JOSH SALMAN and NICK WILLIAMS

Staff Writers

LAKEWOOD RANCH -- As bulldozers move dirt on a massive plot along University Parkway and Interstate 75 for what will become the largest shopping hub from Tampa to Fort Myers, the master-planned community just a stone's throw east is poised to profit.

Commercial interest in Lakewood Ranch is projected to spike when the University Town Center comes out of the ground in late 2014 -- further bolstering what already has become the most desired business destination between Manatee and Sarasota.

"We expect to continue to lead the market in general office and commercial space," said Brian Kennelly, president and broker of Lakewood Ranch Commercial Realty. "That master-planned nature of Lakewood Ranch is well thought out, well amenitized and that bodes well for business."

Lakewood Ranch is a 17,500-acre community stretching between East Sarasota and Manatee counties that plays host to 15,000 residents, a hospital, a 75-acre sports complex, and its own small downtown.

The first commercial building in Lakewood Ranch opened in 1997. The dramatic growth that followed has sprawled to more than 4 million square feet of commercial space between the community's three primary corporate parks.

Most of that new commercial development hit the brakes in 2008 when the housing market crashed. And, like the rest of the area, commercial building activity has been slower to recover.

But because plans for Lakewood Ranch were made years before Florida's housing roller coaster took its toll on the market, business development in the community has been more even, Kennelly said.

More than 900 companies now call Lakewood Ranch home, including some of the area's most well-known employers -- TriNet, MGA Insurance, and the headquarters of First Watch restaurants.

Gold Coast Eagle Distribution, an Anheuser Busch wholesaler, is sitting on a $20 million, 160,000-square-foot estate in Lakewood Ranch's corporate park. The company services more than 1,400 retailers a week, employing 160 local workers.

Gold Coast Eagle owner and President John Saputo moved his business from Bradenton to 23 acres in Lakewood Ranch in 2008. He doesn't see the business climate there faltering anytime soon -- Town Center mall or not.

"It's probably the most professionally run business community I've ever had a chance to be a part of," Saputo said.

Small businesses also have flocked to Lakewood Ranch, including Midwest couple Jim and Joan Ayersman, who in September opened a Fannie May chocolate outlet on Main Street, and Sandy Birczak, who runs an indoor cycling and fitness center there.

They're not alone.

Throughout the past year, Lakewood Ranch has had the lowest office vacancy rate in the region, from 11.9 percent a year ago to 10.8 percent in September, the latest figures available.

The rates are higher in all other sub-markets between Manatee and Sarasota -- peaking in downtown Bradenton.

Brokers attribute the area's success to its proximity to Interstate 75 and Lakewood Ranch residents who wanted to open an office close to their homes.

Unlike downtowns, the commercial space in Lakewood Ranch is not high-rise focused. It is mostly newer and designed to be more energy efficient.

Real estate brokers predict the coming $315 million, 115-store University Town Center will only heighten the attractiveness of the area to commercial interests.

"The more people the mall will bring to the area, the more curiosity they will have to see what else is around," said Anthony Mazzucca, managing director of Manasota Commercial Realty. "The mall will become a target for marking this area outside of the region."

The lease prices set by the mall will control the market, dictating the rent other landlords can charge for comparable space from State Road 70 to Fruitville Road. That will likely include portions of Lakewood Ranch.

Part of Benderson's plans also include some out-parcel retail and general commercial space. But Mazzucca predicts the new University commercial center will not directly compete with Lakewood Ranch, where most of the office space now comes in stand-alone buildings.

The University Town Center office component will instead cater to corporations seeking an upscale satellite location like mortgage lenders, insurers or attorneys, Mazzucca said.

Lakewood Ranch retail also should stand to benefit, similar to how the once-struggling Westshore Mall in Tampa was rejuvenated when International Plaza was built just two miles away.

"I don't think the developer would move forward with a project like that if the total market share wasn't growing," said Sean Snaith, an economist with the University of Central Florida. "This is a region with a positive growth profile."

Even at conservative estimates, the University Town Center will produce about $440 million a year in local consumer spending. If you include all of the Benderson-built retail lining University, the total climbs to $1.5 billion.

Other experts believe much of that spending will come at the expense of nearby Lakewood Ranch business operators.

"Of course it will impact Lakewood Ranch," said Barry Seidel, president and broker of American Property Group of Sarasota. "The pie is only so big to go around."

Businesses, however, don't seem too worried.

They say the businesses at Lakewood Ranch and at the Benderson center will cater to different demographics.

"Traffic to the area is always good for business," said Carmen Spagnola, owner of Wine Styles, an independent wine retail and bar in Lakewood Ranch's San Marco Plaza. "The plus side will outweigh the negative."

Lakewood Ranch developers SMR don't plan to immediately build new commercial space as a means to compete with Benderson.

The company instead plans to let the new commercial construction come with user-specific projects -- like the new ISPG and IRISS corporate headquarters now under construction in Lakewood Ranch.

Those two firms combined are expected to create 50 new positions when their facilities open, on top of the temporary construction jobs.

"The new mall at University Town Center will provide a major impact -- both short-term and long-term -- for our region," said Jacki Dezelski, vice president of east county and community development for the Manatee Chamber of Commerce. "The out-of-town shoppers, in particular, who are attracted to the new mall will find lots of other great shopping, dining and entertainment options in Manatee and Sarasota counties and patronize those businesses as well."

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