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Tuesday, July 14, 2015
Report: Dallas-Fort Worth's retail construction expected to double in 2015
Developers are constructing more retail space in Dallas-Fort Worth by nearly doubling the amount of planned or projects under construction with more than 3.8 million square feet in 2015, according to the latest survey fromThe Weitzman Group, a Dallas firm that tracks the Texas retail real estate market.
This year's construction is on track to be the highest amount of annual construction since 2008.
"Retailers told me, in most instances, they are cutting way back on store openings for 2015 and 2016," Weitzman said, at a broker meeting in January. "Last year, 40,000 retail locations opened nationwide last year. In 2008, it was 115,000 (stores).
But the market seems to be proving Weitzman wrong in the short term as developers add more than 1.8 million square feet to the construction pipeline in North Texas. Last year, Dallas-Fort Worth developers added about 2 million square feet of space.
By mid-year, Dallas-Fort Worth's retail space had an occupancy rate of 91 percent, which brings the North Texas closer to the region's highest occupancy rate in history for retail space of 92 percent, which was recorded in 2000.
The Weitzman Group tracks about 192 million square feet of space in multi-tenant retail properties with 25,000 square feet or more in North Texas.
The new construction in Dallas-Fort Worth is significantly leased with the majority of retailers being anchor tenants (such as grocery stores or retail giants like Nebraska Furniture Mart) or junior anchor tenants.
As in the past five years, grocery stores — Kroger, Sprouts, Whole Foods, Fresh Market, WinCo Foods and Walmart — are still the driving force behind a significant amount of the new construction of retail space.
The Weitzman Group is tracking a growing number of new and expanded retail developments in North Texas, such as the expansion of The Shops at Park Lane, the construction of mixed-use project West Plano Village and Preston Hollow Village.