Weitzman Declares 2025 'The Year Of The Grocer II' As DFW Retail Market Maintains Record Occupancy
Sequels are all the rage in Hollywood, but a new one is unrolling in the Dallas-Fort Worth retail sector. Grocers will again drive the bulk of construction and leasing in 2025, with new stores expected from H-E-B, Kroger and Walmart.
Nearly half of the new retail space built in DFW last year was for grocery stores, leading Weitzman to name 2024 “The Year Of The Grocer.” Of the 1.5M SF of new retail space delivered in 2024, 696K SF of it was for traditional grocers, according to data shared at Weitzman’s annual forecast event Tuesday. Occupancy at grocer-anchored community shopping centers hit a record high of 96.4% in 2024.
Weitzman officials expect that success story to repeat in 2025, with grocers again pushing the retail sector to a new record occupancy rate of 95.6% thanks to 2.7M SF of both construction and absorption forecast for the year.
“Think about this, our largest category is also our healthiest,” Weitzman Executive Managing Director Bob Young said at the event. “Grocery-anchored retail dominates the market inventory with 495 shopping centers totaling 74.4M SF.”
The Metroplex’s overall retail market also saw a redux of its 2023 occupancy record, maintaining a 95.1% pace for 2024 despite new vacancies continuing to pop up as struggling retailers like Conn’s and Big Lots closed stores.
Of DFW's nearly 200M SF of retail inventory, less than 10M SF were vacant at the end of 2024, a more than 40% decrease from the 17M SF vacant in 2020.
The Metroplex is currently amid its strongest market ever in terms of balanced supply and demand, Young said.
“Our market today is tight enough and strong enough that any well-located vacancy won't stay vacant for long,” Young said. “The fact of the matter is that we have so many people moving here and too little construction for that to happen.”
Weitzman also removed 1.9M SF from the Metroplex's inventory during 2024 due to it being changed to nonretail uses like medical/office or demolished for alternative purposes like multifamily.
The Metroplex's overall 95.1% occupancy was mirrored in both Dallas and Fort Worth individually, though nearly 69% of the region's retail inventory is located in the former city.
The Houston, Austin and San Antonio metros each surpassed DFW's overall occupancy in 2024, with the state capital leading the way at 97%. However, only Houston's 166.3M SF of inventory comes close to the Metroplex's.
“All of these markets are posting record or near-record occupancy,” Young said. “Texas retail has never been as good as it is now.”
While the new space delivered in 2024 outpaced the 1M SF that came online in 2023, new development will remain conservative in the new year.
"This limited development is another reason our retail market remains so tight and that leasing is so strong in existing centers,” Young said. “No one wants to get over their skis with a lot of spec space.”
