Retail is Still Hot in DFW: Occupancy Highest in Decades

DALLAS—After NAI Robert Lynn Retail acquired the operations of competing brokerage firm Street Commercial Real Estate last fall, Dan Avnery, president of NAI Robert Lynn’s Dallas retail division, talked of it boosting the firm’s tenant representation presence. Up to that point, the firm largely represented landlords.

NAI Robert Lynn Retail now leases 400-plus retail properties in the DFW area. Street Commercial Real Estate’s previous owners, brothers Josh and Ari Mann, are now running a tenant representation group for NAI Robert Lynn.

“This gives us a strong tenant representation team that we didn’t have before and it should generate more revenue for our firm and market share we didn’t have,” Avnery tells GlobeSt.com. “Both Josh and Ari came to our Dallas office and, at the same time, Monika Guzman was forming a relationship with our Fort Worth office and decided to join as an additional tenant rep specialist to further bolster our presence.”

Because of the number of retail properties NAI Robert Lynn leases in DFW, it’s “almost automatic” that any retail property search will contain one of its listings, says Avnery.

“It’s easier for our tenant rep specialists to walk over to an office of one of our landlord rep specialists and ask for details rather than a phone call or email to an outside company, and also much easier during the negotiation portion of the deal process for our brokers to discuss internally, in-person rather than a phone call or email,” Avnery tells GlobeSt.com. “We complete many deals as an intermediary, which is when NAI Robert Lynn represents both the landlord and the tenant.”

He acknowledges how some might view this double ending of deals, and discussed whether it leads to client-prospects being concerned about a conflict in NAI Robert Lynn taking on assignment.

“We do get that question from time-to-time before a new client signs our listing agreement,” Avnery tells GlobeSt.com. “We let them know that by signing up with us, the client is guaranteed to see nearly all prospects looking for space in the market, and it’s up to the client on how aggressive they want to be to win each one. Typically, we see that landlords will choose hiring us in order to be exposed to the maximum number of prospects versus hiring someone else to avoid all conflicts. With my five years serving as the president of the Dallas retail division and our 400-plus active retail listings in DFW, I cannot remember a time where a conflict turned into an upset client. We always give a fair chance to our clients to win each tenant looking for space in the market.”

It’s widely known that retail has been a tumultuous product type in recent years. At the SIOR spring conference in Washington, DC earlier this month, one of the keynote speakers said, “retail real estate isn’t as overbuilt as some people say–it’s just under-demolished.” And a recent Coresight research report states that US retailers have already closed 5,994 stores so far this year, compared with 5,864 stores for all of 2018. The net store closings or number of closings minus new stores that have opened is negative 3,353 this year. Even with the population growth in Texas in recent years, one might wonder if that is enough to keep retail stores’ doors open.

“The Dallas/Fort Worth metro area has a very healthy balance of supply and demand. I’ve read reports recently that we currently have retail real estate occupancy at its highest percentage over the past 30 years,” Avnery tells GlobeSt.com. “We are extremely lucky to be doing business here. As far as retail as a whole, there are plenty of service-based uses that you cannot buy on the Internet to keep shopping centers full. Some common examples are restaurants, dentists, chiropractors, vets, urgent cares, hair salons, nail salons, tutoring centers, dry cleaners, gyms, martial arts, dance studios, yoga studios and many more.”

Avnery says fitness and entertainment occupiers are backfilling anchor spaces and signing new leases. For example, there has been a wave of trampoline park users that have taken space in former grocery stores. Existing fitness operators such as LA Fitness have expanded. And Massachusetts-based Fit Factory is new to the DFW market and plans to open two large-format locations this year–in Colleyville and Garland. The company chose DFW for its first expansion out of the Boston area.

All in all, Avnery retains a positive outlook about the retail landscape. He says retailers are making money and need to continue expanding to satisfy investors. Mover, landlords have a shrinking supply and are building more in certain parts of the country.

So, at ICSC’s RECon coming up in a few weeks, Avnery hopes to see as many clients as possible.

“My goals for the conference? Somebody once told me if you’re not meeting with your clients at ICSC, somebody else is.”