Retail occupancy in the Dallas-Fort Worth market hit an all-time high in the fourth quarter, according to a report from CBRE
At the end of the fourth quarter of 2017, North Texas retail occupancy was at 94.6 percent and more than 5.8 million square feet of new space was under construction. Construction was down from the previous quarter and that may continue, according to the report.
“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,” according to the report.
The Class A big-box supply remained elevated as the market stabilized.
“As forecast, 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 square feet, is due to a smaller pool of big-box retailers,” according to the CBRE report.
There were three major local developments during the quarter, accounting for 702,000 square feet of delivery and absorption in the area: Tanger Factory Outlets in the AllianceTexas area on Oct. 27, Legacy Food Hall in Plano on Dec. 6 and IKEA in Grand Prairie on Dec. 13.
The report noted that there were 1.3 million square feet of retail space under construction during the fourth quarter in the Fort Worth market.