Texas Market Reports

After Hurricane Harvey made landfall on the Texas Gulf Coast, the storm’s impacts on commercial real estate were most immediately felt in the single- and multifamily spaces. As the recovery effort got underway, it became clear that some office buildings had been damaged, driving down occupancy in that sector, while demand for industrial materials and space rose. Perhaps because retail occupancy in Houston — which most recently clocked in at 94.6 percent, according to CoStar Group — has been strong throughout the oil downturn, or because most store closures stemmed from employees being unable to get to work, the storm’s impacts on the retail sector have been somewhat trickier to measure. Whatever the case, nearly four months after the storm, retailers in certain industries are seeing their sales figures climb dramatically, and without help from the holiday shopping rush. Grocers Lead the Way The grocery business — a form of brick-and-mortar retail thought to be somewhat insulated from e-commerce — has been at the forefront of retail segments seeing an uptick in sales following Harvey. Residents experiencing power outages and damaged refrigerators generated healthy and immediate demand for groceries. “Grocers were particularly impacted by Harvey, and in the aftermath it …

As the real estate world addresses the uncertain future of brick-and-mortar shopping, the market for retail investment in San Antonio remains strong. The recent bankruptcies of physical merchandisers such as Toy “R” Us, Radio Shack, Rue 21 and Payless Shoes — to name but a few — have proven that retailers must adapt their strategies to an ever-changing environment. In San Antonio, however, a historically low volume of new retail development and decreasing vacancy rates, combined with strong fundamentals, have attracted and secured more retail investors than ever before. San Antonio’s thriving economy is supported by steady job growth — 25,000 jobs have thus far been added in 2017, according to the City Employment Statistics survey. The Bureau of Labor Statistics put San Antonio’s unemployment rate at 3.7 percent as of August 2017, versus the national average of 4.5 percent. Often referred to as Military City, USA, San Antonio is home to Joint Base San Antonio, which includes Fort Sam Houston, Lackland Air Force Base and Randolph Air Force Base. These military installations alone employ roughly 90,000 people and have an estimated $27 billion impact on the local economy. These statistics, coupled with the market’s steady job and population growth, …

With occupancies, rental rates and volumes of new construction on the rise, the Fort Worth retail market continues to draw a great number of investors and available debt lenders to the area in search of deals. Stabilized strip centers in high-traffic areas are in high demand, often trading at first-year returns in the high-6 percent to low-7 percent range. The Dallas-Fort Worth (DFW) metroplex’s thriving economy and growing population has prompted greater retail spending, which, in combination with the shifting retail landscape, is generating strong demand for  space. During the first quarter, area employers added 24,300 positions. Many of these jobs were created at businesses that are situated within master-planned, mixed-use developments that combine office, retail and rental units, which has helped foster greater retail spending. As of the first quarter, average retail spending per household in Fort Worth reached $4,439 per month — 17.3 percent higher than the U.S. average. Looking forward, it seems likely that these trends will continue as the DFW population is projected to expand by 728,000 people over the next five years. This should help sustain healthy demand and positive momentum for retail real estate. Along with the positive economic outlook, the reconfiguration and diversification …