05/20/2023
As the markets continue to shift, I thought it would be helpful to share a few takeaways from the May 2023 Retail Market Report generated by CoStar.
◾ DFW Retail Vacancy is hovering around 4.6% with ~4mm square feet under construction. 74% of this space is pre-leased.
◾ Development is concentrated in high growth counties such as Collin and Denton. McKinney, Frisco, and Allen are leading the pack as it relates to new inventory under construction.
◾ Home goods, discounters, and F&B tenants are the primary drivers of demand with Hobby Lobby, Big Lots, Dick's Sporting Goods, and Nordstrom Rack reporting new leases over the past 12 months.
◾ Approximately 50% of new leases have been for spaces smaller than 5,000 SF.
◾ Most new development is mixed use in nature, which helps mitigate the risk of oversupply.
◾ Market retail sale prices have been on the rise since 2017 averaging $259 psf this year, however Costar is estimating a moderate price decline as we move into 2024. Average cap rates are around 5.7% with a strong uptick forecasted over the next 24 months.
If you're interested in the full report, please comment below or send me an email at [email protected].
