When People Say Everything is Bigger in Texas
When people say everything is bigger in Texas, we mean exactly that. Whether it is the BBQ portions or the sprawling properties. Texans know BIG. But the cost of living remains very reasonable. With no State taxes to pay, Texas goes a long way to appealing.
A very hot real estate market has helped attract and lease up shopping centers throughout the North Texas region. With a 92.5 percent occupancy rate, the second highest occupancy rate in more than tree decades. This is not a fluke, but carefully planned by landlords and developers, who recently unveiled it’s 2018 Forecast Report for Texas.
The retail environment is certainly changing, but it has been changing decades. While we have had more construction than we have ever seen since 2008, the majority of that is either pre-committed or significantly pre-committed. when you add construction numbers from 2017 to the shopping center stock, it doesn’t add to vacancy, but to occupancy.
In North Texas, developers completed 4 million square feet of new retail construction, which is the first time the region has hit this high mark in over a decade. As well, this is a much healthier mark to hit with this current market.
Sprawling North Texas Region
As long as we don’t get in over our heads with excess construction, we will see this retail cycle as a very stable retail cycle. For North Texas, this means executive measures and calculated risk, with the health of the region’s retail space, which totals 197.9 million square feet sprawling about 1,417 shopping centers that are at least 25,000 square feet or bigger.
Here are 5 trends some experts continue seeing in 2018:
Aging retail properties, such as Collin Creek Mall, will continue to transform and redevelop. Plano, Texas has turned microcosm of the North Texas market. The city has older properties, such as the Collin Creek Mall and some newer retail properties being developed such as the Legacy West. The city of Plano illustrates the changes in retailing in the region.
Even though the retail behavior at Collin creek Mall has changed, the real estate is still strong. And that makes it an ideal property for redevelopment. which will likely still include a retail component. This has also happened at Plano’s Willow Bend Mall. The ownership group tore down the former Sak’s Fifth Avenue store to make way for restaurants and a new Crayola store and office space.
Now to Grocer’s
Grocer’s are re-inventing themselves in the market through omni-channel delivery to customers. H-E-B has shown no signs of coming into the core Dallas market. With Central Market being H-E-B’s main play in the region. Except for new stores on the outskirts of the sprawling North Texas boundaries.
But other grocer’s like Lidl sporadically picked up plans aimed at entering the market. Those mainstay grocers such as Tom Thumb, Market Street and Kroger have been innovating delivery methods to appeal to a variety of customers.
Experience centered retail will add depth to shopping centers plays with customers. When Willow Bend Mall decided to bring in a big Crayola store and Stonebriar Mall in Frisco,, Texas decided it needed a KidZania, each store wanted to give their customers an experience they can’t get anywhere else. Now Barnes and Noble also got creative with it’s new store at Legacy West. Adding a full food and bar concept to keep customers reading and in the store’s four walls longer. They re-tooled who they are to continue to get their customers shopping in the store.
Now, expect more mixed sue developments to spring up with retail components as the region gets denser. The by product of a fast growing population adding jobs, people and rooftops to North Texas is that developers are getting innovated on how they are delivering retail space. in urban markets, this means more mixed use developments with street level retail space, including big projects like Legacy West.
Innovative Developers and retail Stores
E-commerce is having a real life effect on DFW‘s retail market. This growing portion of the retail industry has given retailers an opportunity to offer goods and services outside brick and mortar locations, via another distribution channel.
This has been so complementary to retailers to up their game with their products, brand loyalty and customer base. North Texas has tacked on physical locations for online retailers as well. Amazon expected to pop up a bricks and mortar sometime soon. Some doubt the retailer is looking at brick and mortar opportunities. After all omni-channel distribution is about getting to customers on multiple levels.
One trend to keep an eye on is Food Halls. Legacy Hall has been well received and expects a few more to pop up through out the region.
Article Topic: When People Say Everything is Bigger in Texas