More new retailers are coming to town. Construction, though half of the 2000 delivery, will still bring another four million sf to market and most of that is already pre-leased. Active leasing, occupancy in the 90s and solid rental rates all spell success for the market."Retailers wouldn't keep coming here if they weren't doing well," Ian Pierce of Weitzman's communications and research departments, tells GlobeSt.com. Last year was a hard act to follow, says Pierce, but so far this year the market is maintaining a healthy equilibrium in a market pushing a 140 million-sf inventory.
Cast away concerns that a sluggish national economy is going to impair the DFW market. Strong housing and job growth position the metroplex to retain its leadership status nationally. "What's happening is because of the economy and large population (5.2 million) and demographics, we've pretty much shown up on everyone's radar," Pierce says.
On the average, annual rent is riding about $12.40 per sf, up 10 cents per sf. In Frisco and Park Cities-Oak Lawn, it's a far different story, with rent ranging in the mid-to-high $20s per sf on the average.
The Frisco area remains the region's hot ticket. It's a natural landing spot for mall owners and peripheral retailers since the Dallas suburb led the state in growth, jumping its population by 392% in the past decade. Frisco projects accounted for one-third of the 8.8 million sf that delivered last year and promises to keep its foothold on the retail market as developers line up projects on sites around the 1.5 million-sf Stonebriar Centre. Nearby Plano, not to be undone, is reaping the reward of the newly opened 1.4 million-sf Shops at Willow Bend.
Malls, though shaky in some regions nationally, are a continuing revenue driver in Texas, where shopping ranks high on the list of favorite pastimes for natives and newcomers alike. Rumor has it that Simon Property Group Inc. will have its Firewheel Town Center, planned for Texas 190 and US Highway 78 in Garland, on line in 2003. The Indianapolis-based mall owner already has signed Dillard's and Foley's as anchors. Existing malls from one end of the metroplex to the other have been caught up in a record-setting expansion wave now going into its fourth consecutive year. "Definitely it's the most active mall market in Texas, if not in the US," Pierce says. Equally strong is the growth in the community shopping center sector and another Texas favorite, the restaurant market, teeming with new concepts.
Pierce is tossing out a word of caution that occupancy could dip below 90%. But the quick re-leasing of big box shutdowns--Montgomery Ward, Sears HomeLife, Weiners Plus--is a hardy indicator that "the market won't take a hit" that originally was projected, he proffers.
The steady influx of new retailers is a good sign that all's well. Joining the DFW roster are H-E-B with its Central Market concept, Louis Shanks Furniture, Neiman Marcus Last Call, Ultimate Electronics, Nordstrom subsidiary Faconnable, Yes! Less grocery, Pei Wei Asian Diner, Brinker concept Big Bowl, Galyan's Trading Co., Pottery Barn Kids and a comeback by Steak n Shake. Meanwhile, existing retailers are steamrolling expansions. Adding to DFW portfolios are Lowe's, Home Depot, 24-Hour Fitness, Sears The Great Indoors, Walgreens, Eckerd, SuperTarget, Wal-Mart, Sam's Club, Costco and grocers Albertsons, Kroger and Tom Thumb.
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