Dallas-Fort Worth Retail Leasing Activity Is on the Rebound
The Dallas-Fort Worth retail market is on the path to recovery, with leasing activity turning a corner.
From January through May, retail tenants have signed on for 3.5 million square feet, up 31% from the trough reported during the same time last year. The largest lease signed thus far this year is Hobby Lobby taking 55,000 at the Gates of Prosper, a new shopping center led by Blue Star Land. Read Full Story
While leasing activity is tracking higher in 2021, it remains just below pre-coronavirus pandemic levels. Last year, average monthly leasing fell to 546,000 square feet, well below the 820,000 square feet average set between 2017 to 2019. In 2021, that level is rising closer to pre-pandemic levels at 690,000 square feet.
After several quarters of disruption, the metroplex's retail market is steadily improving. The market is tracking 670,000 square feet of net absorption, the difference between move-ins and move-outs, as the second quarter wraps up, making it the first quarter of positive net absorption since the first quarter of 2020. The market initially reported negative net absorption due to lingering storm damage from a tornado that passed through in October 2019.
In the wake of widespread economic disruption from the pandemic, scores of small and medium-sized retailers, as well as several national ones, closed their doors, hollowing out large amounts of space in the market. As a result, vacancy rates have expanded above 6%, the highest rate since 2014.
In-person shopping in Dallas-Fort Worth is making a comeback, though. Based on aggregated mobility data from Google, more people are spending time in retail and recreation locations than they have in the past year. In-person shopping in grocery stores and pharmacies is elevated also, though these segments were reporting more activity all along, given they were identified as essential retailers throughout last year.
With greater foot traffic and in-person spending, potential tenants are more confident in committing to taking space.