IRR-Dallas Mid-Year Viewpoint 2015 Local Market Report - Retail
The Dallas retail market is strengthening and has moved from recovery into the expansion stage within the market cycle. Strong population growth within the region, low unemployment, and expanding business within several key industry sectors has created a favorable climate for retail. Overall vacancy rates decreased over the first part of 2015 and very little change is expected for the remainder of the year. Overall rental rates have increased consistently over the past two years and 2015 should see a continued increase in rates. Both cap rates and discount rates decreased slightly over the past 12 months and will likely stay relatively flat through the second part of 2015.
Absorption was positive over the prior year and should stay positive through the coming year, even with a recent increase in construction activity. Both downtown Dallas and the suburban areas have retail projects under construction, with an estimated 2.7 million square feet expected to be delivered over the next year.
A notable trend in the Central Business District and Uptown is the redevelopment of vacant office space into mixed-use developments with retail components. Such projects include the $225 million McKinney & Olive development and the $170 million redevelopment of the 52-story, 1.3 million square-foot former office tower at 1401 Elm Street. Several new master-planned communities in suburban areas of Dallas are designed with retail components as well, including Legacy West in Plano, CityLine in Richardson, and Wade Park and The Gate in Frisco. Existing developments such as Rayzor Ranch in Denton and Craig Ranch in McKinney are continuing to expand with the addition of more retail space. Given continued increases in occupancy, new construction, and rental rates, the Dallas retail market should continue to expand through 2015.
Download the full version PDF of this Local Market Report below. It includes graphs and tables.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.