Texas Market Reports

Virtually every American mall that is struggling owes its woes to some combination of e-commerce growth and millennials’ preference for experiential retail. But the simple fact remains that e-commerce still only accounts for about 10 percent of total retail sales, according to the U.S. Department of Commerce. And while store closures are still running rampant, new retailers are rapidly backfilling those shuttered spaces and introducing new concepts to maintain consumer appeal. To that end, projects that convert enclosed malls into open-air destinations that feature local or first-to-market retail concepts, more food and beverage options, open spaces for communal events and distinct entertainment (and other) uses represent paths to salvation. These projects offer developers and landlord opportunities to restore their malls as bastions of shopping, dining and entertainment — and to address unfulfilled needs within the local retail market. While every project is different in terms of how the tenant roster is revamped and how much construction is required, all mall redevelopments share the goal of returning to relevance within the community. In this piece, we highlight four Texas malls that have or are undergoing extensive redevelopments to boost occupancy, sales, foot traffic and prestige in the eyes of consumers. Park …

Innovative new retail experiences are appearing across the United States, and Texas is no exception. We started with food halls and experiential outings like escape rooms and now see even more creativity, from axe-throwing bars and esports arenas to Instagram-worthy art installations like Candytopia and experience-driven restaurants and bars like Pinewood Social. Throughout the country, there is a preferential trend toward experiential retail — businesses that provide consumers with unique, unforgettable encounters — and it’s simply a response to changing consumer tastes. Typically, a shopper visits a particular store for one of three reasons: convenience, value or experience. Today, we enjoy greater shopping convenience than ever before. In many areas of the country, we can get nearly everything we need from internet retailers, often with same-day or two-day shipping. According to PwC’s Global Consumer Insights Survey 2018, 41 percent of consumers are willing to pay extra in order to get same-day delivery, while 23 percent are willing to pay for delivery within three hours. Meanwhile, companies that provide exceptional value are showing growth compared to their peers. For example, the parent company of T.J. Maxx and Marshall’s showed steady positive increases in annual sales growth from 6 percent in 2015 …

For decades, all classes of commercial real estate in Dallas enjoyed somewhat lopsided advantages over Fort Worth. Until about 15 years ago, Dallas, the main beneficiary of the job, housing and population growth coming to the metroplex, commanded the lion’s share of demand from commercial real estate users while also having more capital for new development. Retail was no exception. Today, the Dallas area has seen its retail scene push northward toward Plano and Frisco, the new hubs of corporate relocations and regional workforce consolidations. But the combination of a shortage of developable land and a tight vacancy rate within the Interstate 635 loop is pushing rents. On a triple-net basis, rates are now as high as $60 per square foot in top submarkets like Uptown, Lakewood and Deep Ellum and $90-plus per square foot in the tony Preston Hollow and Park Cities submarkets, according to HSM’s research. Our data also shows that the average retail vacancy rate within the Interstate 635 loop in Dallas is approximately 2.6 percent, while there is 205,000 square feet of new space under construction within this area. By contrast, the urban core of Fort Worth inside the Interstate 820 loop spans about half as …