DFW Retail Experts Say 30% To 35% Of Restaurants May Not Reopen

The impact of the first modern-day pandemic on North Texas is still unfolding, but once it ends, retail professionals expect to find a much smaller shopping and dining footprint in Dallas-Fort Worth.

"Some mom-and-pop [outlets], those guys just didn't have a lot of cash in the bank," Transwestern Managing Director of Retail Services Steve Williamson said during a Bisnow webinar Thursday.

Williamson said any retailer operating on the margins before the national crisis has even less hope now with retail traffic virtually down to zero and customers expected to demand different on-site experiences when they return. 

He's even hearing predictions from retail industry contacts that when the restaurant business reopens, at least 30% to 35% of the locations that closed due to the coronavirus will remain shuttered for good.  

Prior to the shutdowns, Williamson's clients were filling big-box retail spaces with gyms, places for kids and entertainment centers as part of a national push toward experiential retail.

After the coronavirus, the experiences offered inside these facilities are expected to change once again with lower-density crowds and higher-quality sanitation now taking precedence over exercise and fun.  

"I think there is going to be a lot of emphasis on cleanliness, sanitizing ... and social distancing," Williamson said. "There will be people that will be very concerned about it."

Restaurant operators have told Williamson they will be spacing out tables, not having as many seats and placing limits on the number of people who enter a premises at the same time. 

Sam Moon Group's Daniel Moon, who is part of the well-known Sam Moon retail store and hotel development group, has watched both parts of the business derailed by the pandemic. 

"First, all of our retail stores, we were forced to shut them down like most retail," Moon said. "From the hotel side, our occupancy is extremely low. It's been tough, and we had to unfortunately furlough a lot of our employees."

Moon expects a comeback at some point and hopes it happens quickly even though he's cautiously planning months in advance and applying for different government Small Business Administration loans to assist in the process. 

“We are preparing for a slow ramp-up," Moon said. "So we’re trying to preserve as much capital flow as possible ... while also trying [for] additional liquidity so that we can last through a very slow ramp-up."

Even still, Moon is confident in the Hyatt Regency hotel his company has under development at Stonebriar Centre mall in Frisco. With this asset already in the development stage, it could eventually benefit from an overall slowdown in the hotel development space, he said.

Many hotel projects halted in the wake of the virus and will not be moving forward for at least a few years. This gives established and newer hotel projects more runway to compete in the coming cycle. 

That means hotel values could reach even higher levels in 2021 and 2022 if the coronavirus crisis slows down the creation of competing product, according to Moon. 

But it could take some time for that to happen, and now is not the time to offload hotel or retail assets. 

"If you have to sell now, your values are going to be much lower with retail," Moon said. "I would not recommend selling anything today if you don't have to."