The big picture
Dallas-Fort Worth finished the year with a record-high occupancy rate of 95.2%, 1.8 million square feet of space absorbed and more than 1 million square feet of new construction. The new record comes after occupancy rates exceeded 94% for the first time in Weitzman’s history in 2022.“In 2023, I along with many of us saw something we’ve never seen,” Executive Managing Director Robert Young said. “D-FW’s retail market reached and it surpassed the highest occupancy rate ever.”
The second highest occupancy rate occurred in 1981, when it was reported at 94.8%, Young said.
“Since that previous peak, think about what we've been through,” he said. “We powered through a real estate crash, the rise and fall of the mall market, the failure of numerous retail chains, several recessions, the prevalence of e-commerce and yes, Amazon; and how can we forget a global pandemic.”The set up
Officials hosted the 2024 Weitzman Annual Forecast on Jan. 11 at the George W. Bush Presidential Center in Dallas. Young presented a first look at how the retail market performed in 2023 and a forecast for 2024.
The report’s data is gathered by surveying more than 1,400 shopping centers across the metroplex.
After the presentation, Executive Chairman Herbert Weitzman sat down with Anton Pil, global head of alternatives at J.P. Morgan, for a Q&A session. The two discussed the state of retail real estate, the economy and what’s to come.
A video of the presentation and Q&A is available on Weitzman’s Youtube page.
Looking ahead
In 2024, Weitzman expects the retail market to remain stable and end the year at 95.8% leased, Young said. More than 2 million square feet of retail space is forecast to be absorbed. Weitzman is also anticipating nearly 2 million square feet of new construction to be delivered this year.Most new construction will come from grocery store chains and other anchor stores, such as H-E-B, Kroger Marketplace, Tom Thumb and Sprouts, Young said. At least 14 new grocery stores will open in 2024 or will be under construction.
“This year will be the most active new construction market for grocers in a decade,” he said.
Stores such as H-E-B, Target, At Home and Hobby Lobby led the pack in construction throughout 2023. H-E-B’s new stores in McKinney and Allen accounted for 22% of all space, Young said.Quote of note
“Our retail market is looking pretty good,” Young said. “So good in fact, it’s the best we’ve ever seen, and at the start of 2024 with me here representing our firm, we have a lot of reasons to think it’s going to be even better in the upcoming year.”
