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May 13 , 2005

Home starts power retail sector

May 13th, 2005 - David Giddens The Dallas-Fort Worth-Denton inventory of retail space stands at 153 million square feet, with Dallas accounting for 105 million of that total and the Fort Worth area hosting 47 million square feet, according to The Weitzman Group, a Dallas-based retail brokerage firm. The current retail occupancy rate in the region -- 90.5% -- is at its second-highest level in the past 15 years, says Weitzman's Ian Pierce, up from 89.7% in 2004. "One reason that the retail market is so strong is that we had almost 44,000 new home starts last year," Pierce said. "We're seeing really strong growth in a lot of the submarkets." Last year, the region added 4.4 million square feet of new retail construction, a whopping 25% increase from the 3.4 square feet built in 2003. The bulk of that 2004 construction, nearly 3 million square feet, landed in Dallas, with the Fort Worth area accounting for about 1 million square feet. Much of the new construction involved expansion of existing centers, including the Galleria shopping mall in Dallas, Lincoln Square in Arlington and the Ridglea Center in Fort Worth. New projects started in 2004 that will be completed this year include the new 350,000-square foot Ikea furniture store in Frisco, a 120,000-square-foot Bass Pro Shop in Garland, and a 230,000-square-foot Cabela's in North Fort Worth. Terry Syler, vice president of Dallas-based The Retail Connection, said the Tarrant County sector contains some of the region's more significant retail growth, including the Weatherford, Burleson and Crowley submarkets, as does the Denton market to the north. "Denton's retail continues to grow with projects like Denton Towne Crossing, and once Loop 288 is expanded you'll see a tremendous push for additional projects coming into the Denton market, especially where the residential developments have expanded," he said. Syler said other hot submarkets include Mansfield, where virtually all major retail space is less than two years old, and Cedar Hill, which has recently landed JC Penney, SuperTarget and Wal-Mart stores, and has a Dillard's and Foley's lifestyle center coming on line in the next couple of years. "The Metroplex is expanding so fast because of good incomes that translate to new residential development, which feeds retail," Syler said. Also included on Syler's list of hot submarkets: Allen, McKinney, Sherman and Rockwall. All of those submarkets, which are located along major freeways, will likely continue to see retail growth at a pace similar to the past five years, he said.
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