DFW Retail Takes Temporary Hit from Pandemic

Dallas-Fort Worth retail occupancy declined due to COVID-19 but fortunately, the market still has room to run. Weitzman’s Matthew Rosenfeld recently shared insights into last year’s stats and where retail is headed.

Q: What did the market face last year?

A: When 2020 began, DFW reported 93.4% occupancy and the best balance of supply and demand in memory. So we were in much better shape going into this downturn compared to previous downturns. The pandemic has hit some already-struggling retailers hard, and closings from JCPenney, Pier 1, Tuesday Morning and others created nearly two million square feet of vacancy.

Assistance for retailers helped stabilize occupancy. For example, we worked with tenants on the PPP loans as soon as they were available, as well as on lease workouts and rent deferrals. We are aggressively marketing our centers and our tenants, working with them to beef up their digital marketing, because that’s necessary in a world where decisions are made via mobile search.

Q: DFW has long been known as an overbuilt retail market. Is that still the case?

A: We project the addition of approximately 1.3 million square feet this year, basically a rounding error on our 200 million-square-foot inventory. Over the past decade, we’ve seen annual construction shrink as new space remains firmly in line with demand. This lack of overbuilding is another positive we have as we deal with this unprecedented health crisis.

The largest project is the expansion of Grandscape in The Colony, where a single store, Scheels, added 331,000 square feet.

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