Within Dallas/Fort Worth’s tightening retail market, strong net absorption and heavily pre-leased deliveries caused occupancy to measure an all-time high. The year has proven to be a strong one for retail landlords and tenants alike, with an expectation of positive sales growth continuing into 2018.
Multiple construction projects across North Texas have been sidelined as labor and borrowing costs remain elevated, specifically for those in the early stages. An increase in equity requirements and cost of capital may result in a delay to bring these projects to market, as well as increased tenant sales volume expectations to appease lenders.
As forecasted, the pace of absorption in big box space slowed throughout 2017 when compared to years past – even within Class A product. As seen in other major U.S. retail markets, elevated supply, at 813,572-sq.-ft., is due to a smaller pool of big box retailers.
Three major local developments celebrated their grand openings recently, accounting for 702,000-sq.-ft. of delivery and absorption in the Metroplex. Tanger Factory Outlets on October 27, Legacy Food Hall on December 6, and IKEA in Grand Prairie on December 13.