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June 08 , 2006

Retailers lured to all comers of North Texas

Grocers and sports stores have plans for D-FW shoppers
June 8, 2006 - by Sandra Zaragoza | Dallas Business Journal. At the recent International Council of Shopping Center's convention, a number of retailers told industry folks they have big plans for Big D and beyond.
"San Antonio, Austin, all of Texas is very much on the forefront," said Mickey Ashmore, president of United Commercial Realty.
This year's ICSC convention in Las Vegas - where real estate deals are made and projects are marketed nationally - was the largest to date with more than 43,000 attendants, up from 41,000 last year. It was held from May 21-24.
The conference bolstered local brokers and developers' belief that Dallas, Fort Worth
and their suburbs are magnets for retailers, from discounters and upscale retailers to sporting goods shops and banks.
"There is a ton of new development, a lot of tenant activity and interest in the market," said John Zikos, partner in Dallas-based Venture Commercial. A more robust economy, a booming population and good job growth are driving retail growth in the Lone Star State. And, locally, strong sales performance by existing stores is providing proof the depth in the D-FW market, said Steve Lieberman, president of Dallas-based The Retail Connection.
"Dallas continues to be a very productive market for retailers," Lieberman said. "They want to capture those sales."
With the success of new super-sized shopping center developments called lifestyle centers, retailers are starting to understand that some suburban and urban markets, which may appear a bit green, are primed to generate sales.
The industry calls them lifestyle centers because they include a different mix of big stores such as chain bookstores, eateries and houseware retailers.
"Lifestyle retailers are realizing (these markets) have the depth and the income and the purchasing power," Ashmore said.
A slew of retailers are looking to break into North Texas or raise their profiles here, brokers say.
It's no surprise that retail leaders like Target and Wal-Mart are still multiplying in, in-fill locations as well as the outlying suburbs.
But with the anticipated contraction in the market of Albertsons, grocery stores like Kroger and Tom Thumb also are starting to look at deals again. These stores had recoiled in recent years in the face of increased competition. Lubbock-based United Supermarkets Ltd. - a newer player in the market - is said to have a number of deals for its Market Street format in the works.
Junior department stores Belk, Kohl's and J.C. Penney are also upping their profile spurred on by brisk sales, Lieberman said.
Sporting goods' stores are .also seeking a bigger piece of Texas' action, insiders say. Dick's Sporting Goods is planning to delve more heavily into the D-FW market; Academy Sports & Outdoors continues to fill the market, and Sports Authority told some brokers that it has a strong interest in the state.
Consumers may also spot the return of some familiar faces. Houlihan's, an American- style restaurant and pub that was once here, is said to be considering returning to the market, Ashmore added.
All corners of North Texas hold some appeal for corporate retailers.
"There is activity in Rockwall, Frisco, out to Little Elm, McKinney and west down to Weatherford, south to Mansfield and Cedar Hill - truly in every direction," Lieberman added.
Space available
Occupancy across all shopping centers in the D-FW area averaged 87% in 2005, which was down from 89% occupancy in 2004, according to Dallas-based Roddy information Services Inc.
Retail absorption, a measure of how quickly new space is leased, fell from about3million square feet in 2004 to about 670,000 square feet in 2005, but considering the "massive amount of new space coming online, the space is being absorbed very handily," said George Roddy Sr.
Bob Young, managing director of Dallas based The Weitzman Group, believes there will be continuing demand for retail space throughout Texas, but questions whether increasing rents will ultimately affect the success of some retailers.
Nevertheless, Young said: "Retail shopping in Texas is powerful, and I don't see that fundamentally changing in the next 18 to 24 months."
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