Retailers continue to target the fast-growing North Texas market, driving occupancy rates to 91 percent—the highest in 15 years, according to a new report from The Weitzman Group. Class A centers are running closer to 96 percent occupied, pushing up lease rates in those types of properties.
It’s all prompting a new round of retail construction—to levels not seen in more than a decade. In all, the DFW market is on track to add more than 3.8 million square feet in 2015, through both new projects and expansions. This compares to the 2 million square feet that came online in 2014. Still, it’s a conservative figure for an economically thriving market with nearly 7 million people.
Grocery stores continue to dominate, although power centers, mixed-use, and specialty retail centers are coming on strong, too. The largest project of the year, so far and by far, is Nebraska Furniture Mart, the 560,000-square-foot store anchoring Grandscape along State Highway 121 in The Colony. At buildout, the complex is expected to include nearly 4 million square feet of retail and entertainment space.
Looking ahead to 2016, several projects are already in the works, The Weitzman Group reports. They include CityLine Market in Richardson (anchored by a Whole Foods store), A Sprouts-anchored center at Teasley Lane and Hickory Creek Road in Denton, a WinCo grocery store and new cinema at Presidio Junction in Fort Worth, a Winco at Interstate 20 and Cooper in Arlington (where a vacant Sports Authority is being demolished), a new phase of Euless’ Glade Park (which will add a cinema, a major fashion junior anchor, and more), Waterside at Bryant Irvin Road at the Trinity River in Fort Worth (which includes a Whole Foods store), and Wade Park, a $1.6 billion mixed-use development at the Dallas North Tollway and Lebanon Road in Frisco. Retailers there include Whole Foods, iPic Theaters, and a second regional location for The Rustic.
RESTAURANTS EATING UP SPACE
The North Texas retail market is vast, made up of nearly 50,000 locations totaling about 275 million square feet of space. More than a quarter of that—27 percent—is occupied by restaurants and bars, according to statistics released by CBRE. This makes DFW a top national market for dining out, with more restaurants per capita than any other U.S. metro.
Current occupancy of restaurant space is “almost 110 percent,” jokes Jack Gosnell of CBRE, adding that some failing eateries are acquired before they go out of business by restaurateurs who want to snap up the space. Submarkets seeing the most demand are Uptown, Southlake, and Frisco on the Dallas side, and the West 7th and Sundance areas of Fort Worth, Gosnell says.