Retail's 2015 Resurgence Continues Into 2016
As the economy came out of the Great Recession, retail lagged behind the rest of the recovery. It’s now a front-runner for commercial real estate on the rise. Here’s why: Dallas' retail occupancy is the highest it’s been in 31 years—91.6% at the end of 2015 compared to 92% at year-end 1984, says The Weitzman Group managing director Bob Young. Bob says grocery stores dominated new retail construction last year. Kroger (pictured below) opened 123k SF stores in Lewisville, Burleson, North Richland Hills and Bartonville. Walmart defended its ranking as the No. 1 grocer in North Texas by adding nearly 500k SF via its Supercenter and Neighborhood Market footprints.
Other grocers making an impact include WinCo, which opened three new stores by redeveloping existing space. WinCo also has five more locations in the works, Bob says. HEB expanded its Burleson store to 115k SF to create our market’s first HEB Plus. Other grocers expanding in 2015 included Whole Foods, Fresh Market, Sprouts and Trader Joe’s. Bob says one notable highlight of the year is the largest single store built in 2015 (making up 20% of all retail construction for the year): Nebraska Furniture Mart, which topped out at 560k SF of store space and major distribution. For 2016, Bob expects occupancy to rise about 1% up to 92.5%. He forecasts about 1.8M SF of retail construction, which is on par with 2015, minus Nebraska Furniture Mart. It'll be soaked up and then some: absorption is estimated at 2.9M SF.
