July 11, 2019
According to Weitzman’s mid-year report for the Dallas-Fort Worth area, 2019 could represent a record streak of six consecutive years with above-90% occupancy. Marshall Mills, Weitzman President and CEO, discussed numbers and other retail trends in the area.
Q. What are we currently seeing with DFW retail?
A. DFW is at an occupancy high point of 92.6%. That was reached only one other time in the past decade, in 2016. Retail construction is conservative, which means it’s driving the market’s steady demand to already-existing space. We’d forecasted 2019 construction of under two million square feet, nearly half the level we saw in 2018; 2018 was also a conservative year for new space. The current tight market is creating strong demand for the vacant Toys “R” Us boxes, which have gone to fitness and entertainment concepts, as well as other retailers including Burlington and Dick’s Sporting Goods.
Q. Ten years ago, we were edging out of the Great Recession. How does today’s sector compare to 2009?
A. It’s so much stronger. When you look back at 2009, nearly 15% of the market’s space was dark, and the recession meant sales were falling and retailers were failing. Fast forward to 2019, and we’ve got a healthy market with a strong balance of supply and demand. We’re also seeing expansions, especially from the ‘food, fitness, entertainment, beauty, medical and dental, and services’ categories, which all tend to do well with brick-and-mortar. Grocers, restaurants, large and boutique fitness operations, salons and urgent care operators, dry cleaners, dental practices; they all continue demanding retail space.
Q. So, what does this mean for the remainder of 2019?
A. We are as optimistic right now as we’ve ever been. We expect to see the year end with occupancy reaching a record high point of 94% or even higher. We’re fortunate that DFW is a market with steady retail demand, extremely low construction and an economy that leads the nation in job creation, population growth, wage growth and single-and multifamily housing performance. We also benefit from a new generation of retailers, as well as innovative legacy retailers, who understand the blended digital and physical retailing world, and are really making it work.
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