News
Retail: Whoa or Go?
May 6, 2010
| Let's hear it for the Dallas retail scene: Nationally, retail vacancy is still climbing, but in DFW occupancy has stabilized around 87%. | |||
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| We snapped this a couple days ago of Sam's Club and WalMart under construction in Denton, just to show you there is actually development going on, even though Co-Star tells us that nationally retail construction starts have crashed. Weitzman's J. C. Burciago tells us DFW just hasn't seen the long-term fallout of most other cities from national closures the last two years of the likes of Circuit City and Linens 'n Things. In a sliver of national good news, JC says that while construction nationally is continuing to fall, what's being built is essentially anchor space for concepts like Kroger Marketplace, so the construction is adding to occupancy more than vacancy. | |||
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| We keep quoting JC—might as well show him, too. In DFW, he says sales volume is picking up a bit for 2010, but that's only compared to the basically non-existent sales market of 2009, Buyers today are a mix of investors and users, and although financing is available, underwriting standards are far stricter than before, he says. Some properties are sold through seller financing or all-cash deals, but traditional financing is available for purchasers who have great track records. However, the market most likely will not see a return to an abundance of investment opportunities until 2011, he says. Hey, we said retail was okay, not a land of milk and honey. | |||
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| We snapped Alliance Town Center, which features new restaurant construction. Jay says REITs and private equity were net buyers in the first quarter, helping prop up transaction volume. REITs are generally chasing high-quality product, though fewer such assets are hitting the market, he says. This is creating a scarcity premium that may put a floor on pricing for high-end centers. Meanwhile,distressed sales also factored into higher volumes, accounting for nearly 20% of transactions, Jay says. | |||
