April 7, 2016
Connect Retail is our weekly column on the sector, authored by veteran CRE writer Ian Ritter.
It’s distressing when there are blighted malls in any locale.
But things might be looking up for retail in general, which bodes well for the Dallas area.
Retail rents are predicted to increase four percent nationally this year. Plus, retail vacancies are only at 10% in big cities across the country, according to research firm Reis.
This is good news for a commercial real estate sector that has lagged a bit behind others that have since bounced back significantly from the recession.
In the case of the local market, there is a lot of upside to the Dallas economy, compared to other cities across the country, and even in the state, which has fared extremely strong since the recession. Low gas prices are hurting other parts of Texas, but Dallas is poised to have a spike in employment growth this year.
Plus, the revitalization of malls is a big deal currently. Owners are finding ways to adapt to the strife that several tenants are facing, in the wake of multiple store closings, by making their properties more experiential.
The Dallas area has been strong when it comes to retail innovation, and the properties that might be facing challenges now are nonetheless in desirable locations. My take is that they will be reinvented into new and exciting retail venues.
What is your take on the renovation of malls that are going through tough times?