The demise of retail has been greatly exaggerated. This is a point that to be made abundantly clear.
Are there changes happening with retailers all over our industry? Absolutely, but as I heard JLL President of Retail Advisory Services Naveen Jaggi say last week, e-commerce has been an issue for retail since the day those websites started, so its impact is nothing new.
I believe what is slowing retail growth down in Dallas-Fort Worth is the delay in large projects across our market. In years past, these large neighborhood or even regional developments were the bell cow that drove retail growth. While a grocery-anchored center or big box development served as the hub, many smaller strip centers or stand-alone pads would follow on adjacent land.
What has happened in DFW is a slowdown of these developments.
Now this does not mean that these developments are not planned or in the works, but so many have taken far longer to come out of the ground than was originally anticipated. It has caused a bottleneck for tenants, of which there are a many.
Wade Park, for example, is years behind schedule. If you drive up the Tollway, just north of The Star at Lebanon Road and Dallas North Tollway, you will see a large hole in the ground and a half finished Whole Foods box. This development is a prime example of market paralysis. [Editor’s note: Wade Park is also scheduled to be sold in foreclosure in April.] If you look at site plans over the years developers were putting the deal together, you will see multiple changes, but in the end most of the tenants on that plan have landed somewhere other than the burgeoning “$5 billion mile.” Tenants like Reef Point Yoga, for example, have signed leases and want to be a part of Wade Park, but are left wondering when or if it will actually have a chance to open.
Across DFW, you’ll find multiple examples of these large scale projects that have either opened much slower than anticipated, opened on a smaller scale, or not opened at all. Cinemark and the related retail has been promised for over five years at the south east corner of Dallas North Tollway & 380, and it just recently started construction. In Mansfield, there are two very large projects that have great tenant lineups, strong demographic growth, and retail voids, but, for whatever reason, both are far behind on their initial promised turnover. Along U.S. 380, there are multiple developments planned at the major intersections, ranging from simple grocery anchored centers to massive regional retail destinations, but most are well behind schedule.
The old saying says “retail follows rooftops,” but as the evidence of late has shown, retail development is lagging behind the rooftops. The growth of our market has been nothing short of spectacular coming out of the Great Recession, across all classes and industries. Retail, while evolving on the fly, is no different. We just need new space to play with.
Andrew Wiley is vice president at JLL in Dallas.
