Q&A | Barry Seidel

Barry Seidel
President and Founder
American Property Group of Sarasota Inc.
Sarasota

Barry Seidel started American Property Group of Sarasota Inc. three decades ago, after running a series of restaurants and other businesses in Philadelphia. The commercial brokerage firm, which handles retail, office, industrial, hospitality and land transactions, focuses on Sarasota, Manatee and Charlotte counties. Today, the firm has grown to 12 employees, including Seidel's wife, Leslye, and their sons, Adam and Brian. In Sarasota, American Property Group also has been involved in some of the most notable retail transactions in recent years, including bringing national restaurant chain Ruth's Chris Steak House to Sarasota.

Describe Southwest Florida's retail landscape at this point in the current cycle.
I think it's vibrant, it's busy, there's lot of construction going on, people are moving here, and whatever is being built is filling up. There are a lot of new people coming to the tri-county area we focus on, namely Sarasota, Manatee and Charlotte counties. Downtown Sarasota is especially busy. Developers are buying hundreds of acres of land all over the three counties for new residential developments, and as a result, we're seeing shopping centers sprout up in the more populated sections of the three counties, especially Publix-anchored centers. They often go into markets before many would think they are ready. Another phenomenon we're seeing is vertical retail, especially in Sarasota. And demographically, younger people are relocating here, professionals are coming, so we're becoming a more year-round environment.

What are you seeing that differs from previous cycles?
The bull in the China closet in this area is the Mall at University Town Center and Benderson (Development Co.). The company has changed the landscape, and everything they touch seems to turn to gold because they do what they say they're going to do, they do it well and people respond. The other big trend this go-round is Amazon, though we're not yet sure what the impact of their new humongous warehouse in Ruskin is going to be. But they're a behemoth and something to be concerned about.

Non-traditional retail growth, from Wawa to Starbucks, is dominating the landscape. What's driving that trend?
Pharmacies, particularly CVS and Walgreens, used to be in shopping centers. Now, they've adopted a concept of “best corners,” and their stores are sold like a bond to be a part of investors' portfolios. And it makes sense because they are very sellable properties. But for that, they need to have independent locations.

The same is true for Starbucks and others now. The concept is double-edged. It creates a more valuable entity for the consumer, with drive-thrus, and it's a better marketing tool for the user. At the same time, from a real estate perspective, they're a low cap rate property.

Given Southwest Florida's predominant demographics, is online shopping having a significant impact on bricks-and-mortar retailers?
Online shopping is a major phenomenon here and everywhere, and I think it's only going to become a more important part of everyday life going forward. Look at banks. Banks are closing their drive-thrus and in some cases branches altogether as paper money is used less and less. At some point, with technology, I think we'll stop using paper money altogether.

At our business, we don't go to the bank to make deposits anymore. We scan checks with the technology they provided us. So the people who I think should be concerned about that trend are CVS and Walgreens. There's no reason to go to a pharmacy if Amazon can deliver your drugs to you in a timely manner.

By the same token, I think you'll see the Publixes of the world get more into grocery delivery. But that phenomenon won't cripple the market in the tri-county area, because there are still people who will want to shop and touch things, and get things right away. And in Southwest Florida, more people tend to have a lot of time and money, relative to other places, so that bodes well for traditional shopping, to a degree.

What headwinds, if any, do Southwest Florida retailers face?
I think we're totally dominated by the economy at large. If the national economy does well, or the state's economy is doing well, we do well. If not, when the economy is down, we're down.

Why is competition among grocery chains heating up, and why are there so many new entrants into the market?
Trader Joes and Whole Foods and Fresh Market and Sprouts and others are coming because this is a relatively wealthy market and people are willing to spend more money on groceries than in many parts of the country. And different stores go for different niches.

Whole Foods is hoping to attract a different shopper than Publix. It's like the difference between a Cadillac and a Chevy. They're both cars, will get you where you want to go, but at different price points. Even with all the competition, though, Publix is a major player in the market, the dominant player, and it would take a lot to really hurt them.

What are you anticipating for the region's retail market for the balance of 2016?
A lot of I think what's impacting us is the upcoming presidential election. People seem less likely to want to do things, make investments and such, because they're anxious about who the next president is going to be and what their policies will be.

If capital gains laws change, for instance, that would be a game changer that would affect real estate. I think more people should try to sell properties now through 1031 (tax-free) exchanges to position themselves for whatever may happen next year.