The Dallas-Fort Worth retail market continues to improve. As of midyear, it reached an occupancy rate of 89.3 percent—a slight improvement over the rate reported at year-end 2012 and the strongest occupancy level since the pre-recession year of 2007.
The rate is based on an inventory of approximately 186 million square feet of retail space in shopping centers with 25,000 square feet or more—one of the largest retail inventories in the country.
So why does our retail occupancy continue to improve? One key factor is the continued backfilling of vacancies. Notable concepts that committed to existing-center retail space include:
• Belk, which is under way with its new 2014 store in the 170,000-square-foot space vacated by Saks department store at Dallas Galleria.
• Nordstrom Rack, which opens in fall 2013 in Gallery on the Parkway Shopping Center in Far North Dallas.
• Grocers like Sprouts Farmers Market, which opened in a 33,000-square-foot space at Tarrant Parkway Commons, located at 2005 South Main Street in Keller; Walmart Neighborhood Market, which acquired a 58,000-square-foot vacant grocery building at 3312 Preston Road in Plano for a new location; El Rancho Supermercado, which backfilled the vacant Office Depot space at Gaston Avenue at Hall; and Whole Foods Market, which took 40,000 square feet of vacancy off the market for a new store to open at Village Park at Colleyville in 2014, located at Glade Road and Highway 26.
In addition, even more grocers are in the process of committing to backfilled space in markets like Arlington and Lewisville, which will boost occupancy even more. Based on projects either opening or set to open during 2013, the market is on track to see new construction of more than 1.5 million square feet, compared to new space totaling just under 1.2 million square feet the previous year.
The 2013 annual construction is still considered very conservative, reflecting the caution that retailers and developers continue to exercise in an economy that, though strong, still has not fully recovered from the recession.
New projects for 2013 include:
• The first phase of West Plano Village, a mixed-use project to include retail, office and multi-family space located at the Dallas North Tollway and Parker Road. The retail’s anchor, a 10,500-square-foot eatZi’s Market and Bakery, opens this fall, with the remainder of the space set for 2014.
• The Shoppes at Renaissance Square, located along U.S. 287 near its intersection with Berry Street in southeast Fort Worth, anchored by a 180,000-square-foot Walmart Supercenter that opened in February.
• In addition to Renaissance Square, Walmart is actively opening its large-format supercenters and smaller Neighborhood Markets, including one that opened at 115 W. FM 544 in Murphy in July. The 180,000-square-foot store represents the relocation and expansion of a smaller Walmart Neighborhood Market. Also in the works: a supercenter set to open in the second half of the year at 1401 N. Saginaw Boulevard in Haslet, near Fort Worth; a 40,500-square-foot Neighborhood Market, which opened in April at 717 W. Berry Street in Fort Worth; and a supercenter near Denton in the town of Cross Roads. The 186,000-square-foot store will open on Highway 380 at FM 424 in August.
• The expansion of the Kroger Signature store in Flower Mound Town Center, located on FM 1171 at FM 2499. The grocer is expanding by approximately 20,000 square feet, to a total of approximately 85,000 square feet. The expansion is set for completion in October 2013.
• Alliance Town Center along the Interstate 35W corridor in North Fort Worth, which is expanding this year and throughout 2015 as it grows to 1.3 million square feet. During the first half of 2013, the center added a 50,000-square-foot Dick’s Sporting Goods. A phase set for 2014 will add 87,500 square feet, and an additional phase will add approximately 150,000 square feet.
• Woodbridge Centre, at FM 544 and Woodbridge Parkway in Wylie, north of Dallas, anchored by a 123,000-square-foot Kroger Marketplace. The center also includes a 56,000 B&B 12-screen cinema.
• Westside Market, a community retail center at FM 423 and Lebanon Road in Frisco, that is set to open this fall with an approximately 70,000-square-foot Tom Thumb (Safeway) grocery and more than 20,000 square feet of small-shop space.
• Sam’s Club, which is set to open a 128,000-square-foot store by year-end 2013 at the southeast corner of US-287 and FM 157 in Mansfield.
• Trader Joe’s, which opened its first store in Dallas proper on Lower Greenville Avenue in August 2013. Additional Dallas stores, set for 2014 or later, are planned for a site near Knox Street and Cole Avenue and a site at Walnut Hill Lane and North Central Expressway.
The DFW retail market activity, especially retail leasing demand and store growth, is boosted by the area’s economy, which ranks as one of the strongest metro economies in the country. As a result, I expect that we’ll see even higher occupancy by year-end.
Herbert D. Weitzman is chairman and CEO of The Weitzman Group and Cencor Realty Services. Contact him at [email protected].
