Despite the fact that demand for retail space in McAllen is at an all-time high, average asking rents are not rising at rates that preclude new users from entering and expanding within the market. According to the McAllen Chamber of Commerce, the retail occupancy rate currently stands at just under 95 percent. The user base is balanced between big box home furnishing and service tenants, neighborhood retailers providing essential services, entertainment concepts and both national and regional food and beverage users. As one might imagine in a market with 95 percent occupancy, there is considerable new development underway. And while rents, which currently max out at about $24 per square foot for new Class A product, have displayed a steady ascent, they also stand at levels that allow for both users and landlords to comfortably turn profits. Most retail real estate professionals in McAllen live in fear of being overbuilt. And indeed, there is new product of all varieties — freestanding, strip centers, power centers — coming out of the ground. A prominent example of new retail development lies in Shops at 29, a power center anchored by Dave & Buster’s and leased to other large-format users like Burlington and …
