For all the gloom and doom about retail, the sector is actually doing quite well across the Lone Star State. The sector has a 94.7% occupancy rate across the Metroplex, a second-quarter 2019 CBRE report on DFW retail shows. The region absorbed 893K SF in the second quarter, with Far North Dallas alone accounting for 230K SF of absorption.
Construction related to retail in DFW rose 18% for the quarter with 2.6M SF of retail space under development — a statistic that shows while retail is changing in the face of technology, brick-and-mortar itself is not dead.
With the DFW area attracting 132,000 residents from 2017 to 2018 and unemployment at 3%, its lowest rate in 20 years, retail is actually on a positive path, according to CBRE.
Many of the newer DFW retail developments are in far North Dallas suburbs where transplants from across the nation continue to move for jobs and housing opportunities.
Mixed-use developments in these areas, which combine retail with multifamily units, also are driving up construction and absorption numbers in the retail segment.
Warren Buffett’s Grandscape in The Colony is one such development driving retail construction in Q2, with 3M SF allocated to retail, restaurants and apartments.
Data from CoStar Group Director of Market Analytics Paul Hendershot shows a similar pattern with retail activity simply killing it across Texas.
“The Dallas-Fort Worth, Houston and Austin metropolitan areas have built 9.9M SF of new retail space in the past 12 months,”
Hendershot wrote in his report. “In Dallas-Fort Worth, retail comprises 24% of all commercial property space and 12% of employment, adding over 77,000 new retail jobs since 2010.” Hendershot said in his report that the death of brick-and-mortar stores is an overblown topic, particularly in relation to Texas markets.
“Dallas-Fort Worth has led the nation with 3.8M SF of net absorption during the past 12 months, followed by Houston with 3.4M SF,” he wrote.