Halfway through this year, occupancy rates are up and new construction is down in Dallas-Fort Worth’s retail market, according to a report by Weitzman.

The details

Weitzman reported an occupancy rate of about 94.5% across DFW’s 200 million square feet of retail space. It’s the largest inventory for any metro area in Texas. Houston has the second-highest inventory with about 165 million square feet of retail space, according to the report.
DFW is also projected to reach another record low for new construction added. About 641,000 square feet is expected to be delivered by the end of this year. With limited deliveries, retail space remains tight, increasing demand and helping to keep occupancy rates stable.

“It's what we call right-sized,” said Ian Pierce, Weitzman’s senior vice president of communications. “We don't have too much space for the demand we have, and we're staying that way because the construction [is] staying on the conservative side.”

Zooming in

Only 2021 and 2022 have seen lower construction totals since Weitzman began monitoring the market in 1990, according to the report. In 2021, construction dropped below 1 million square feet for the first time in DFW since 1990.
The report cited several reasons for a conservative construction climate.
  • Developments are dominated by smaller centers with a mix of retail.
  • Larger grocery stores are developed with little or no peripheral retail space.
  • Larger new projects are built in smaller phases over several years.
  • Construction costs are higher.
  • Well-located vacancies in existing centers are available.
The construction climate differs from the '80s and '90s when lots of homes and retail spaces were built, Pierce said.

On the other hand

Despite this, construction is expected to increase in Celina, Anna, Princeton and Prosper over the next decade. Each community has a rapidly growing population, and major retailers, such as H-E-B and Costco, have announced new stores coming to these communities.
The report highlighted several new retail projects expected to be delivered in 2023 or later, including:
  • H-E-B McKinney, ​​8700 Eldorado Parkway
  • H-E-B Alliance, 3451 Heritage Trace Parkway
  • Target, corner of Hwy. 380 and Preston Road, Prosper
  • H-E-B Frisco (second store), corner of Hwy. 380 and FM 423
  • Kroger Marketplace, corner of SH 121 and Coit Road, Plano
  • Costco Prosper, corner of Hwy. 380 and FM 1385
  • Costco Celina, corner of Ownsby Parkway and Preston Road
Also of note

Closures of Bed Bath & Beyond and Tuesday Morning locations across the area will open up more than 500,000 square feet of retail space. The space will represent less than 0.5% of the market’s retail inventory, and the outlook for backfilling those spaces is high due to retail demand.

“New tenancy for existing retail centers is occurring throughout DFW in 2023, far outpacing the closings and enabling the market to maintain its record-high occupancy,” the report stated.

The report highlighted several new leases in existing space, including:
  • Fiesta Mart, 724 W. Main St., Flower Mound
  • Barnes & Noble, 6101 Long Prairie Road, Flower Mound
  • Barnes & Noble, 1930 N. Coit Road, Richardson
  • Crunch Fitness, 1701 Preston Road, Plano
  • Meow Wolf, 3000 Grapevine Mills Parkway, Ste. 253, Grapevine
  • Cheesecake Factory, 411 Deer Creek, Highland Village
Editor's note: This story has been updated to correct a misspelled name.