OVERVIEW
DFW Adds More Than 120,000 Jobs In 2019
Major market highlights include:
� DFW again led the nation in job growth and was ranked by the
BLS as the #1 metro for total jobs added (+120,700), beating
larger metros such as New York and Los Angeles
� Net absorption declined from 2018 but remained positive in both
the Dallas and Fort Worth markets
� Vacancy increased to 5.3%, slightly above the national average of
4.6% but in line with markets with a similar size of inventory
� Capital markets send mixed signals but are stable overall
IN FOCUS
Rental Rates Reach Historic Highs In Dallas & Fort Worth
Rental rates carried the retail sector�s most notable trend in 2019 by
sustaining historic highs throughout the year.
Rents in Dallas remained above $17 PSF, finishing
the year at $17.62 or up 6% from 2018. Fort Worth
rents were just shy of $14 PSF, down from 2018 but
still at historic highs.
Dallas posted a new record of $17.65 PSF in Q3. Rent growth over
the past ten years has been consistent with new construction in
northern suburbs where income levels are high.
Fort Worth, on the other hand, is retreading previous territory from
2002 and 2008 shortly before or after recessions. The question then
becomes whether rents reflect the cyclical nature of Fort Wǰٳ�s real
estate market or if a new normal is being established with suburban
growth lifting rents overall. If these rents are unsustainable and remain
at current levels, we should expect to see declining absorption and
leasing activity in upcoming quarters.
Population & Job Growth Continue Bolstering Retail In DFW
Both markets also maintain historic rental rates in 2019
RETAIL MARKET
Q4 2019 | DALLAS
+
FORT WORTH
TRENDLINES
5-YEAR TREND CURRENT QUARTER
ABSORPTIONABSORPTION
310 �
Year-to-date absorption
totals 2 MSF
VACANCYVACANCY
5.3�
Vacancy inches up
from 4.9% last year
DALLAS RENTSDALLAS RENTS
�17.62 �� �
Rents have sustained record
levels throughout 2019
FORT WORTH RENTSFORT WORTH RENTS
Rental Rates (Fort Worth)
�13.82 �� �
Rents remain at 10-year
highs around $14 PSF
CONSTRUCTIONCONSTRUCTION
4.5 �
Construction pipeline
remains steady
SALE PRICESALE PRICE
�188 �
In line with historical
averages
Q4 2019 | DALLAS
+
FORT WORTH | RETAIL MARKET
Q4 2019 | DALLAS
+
FORT WORTH | RETAIL MARKET | 2
DEMAND & VACANCY
Net Absorption Declines But Vacancy Stable
Net absorption declined in both markets but remained
positive. Dallas reached 1.8 MSF positive absorption, down
from 3.1 MSF last year. Fort Worth reached 223 KSF, down
from 1.4 MSF. Leasing activity in 2019 tracked closely with
2018 performance: Dallas was basically flat at 983 KSF while
Fort Worth reached 575 KSF or about 160 KSF down from
2018.
Vacancy appeared to inch upward despite positive
absorption, which may be a counterintuitive result of retailers
giving back space or going dark but continuing to honor
lease obligations.
NEW CONSTRUCTION & DELIVERIES
Deliveries Down But Pipeline Solid
Deliveries in 2019 totaled 3.3 MSF across 104 buildings,
down slightly year-over-year by 1.1 MSF or 35 projects.
Despite the declines in deliveries, the construction
pipeline still averages 3.5-4.5 MSF each quarter. As of
year-end 2019, 4.5 MSF is under construction across 97
properties.
INVESTMENT SALES
Capital Markets Healthy Despite Lower Volume
Volume reached $2.06B, down 35% from 2018. This decline
was driven mostly by a drop in total space traded from 15.1
MSF in 2018 to 10.3 MSF in 2019. The number of properties
was essentially flat at 217, which translates to a decrease in
average deal size of 20 KSF. Average prices and cap rates
remained stable at $188 PSF and 6.5% respectively.
The key takeaway is that retail investment indicators in
DFW depend on individual characteristics of the properties
traded that year. As a rule, a decrease in volume can be
explained by a decrease in average deal size with price
moving in either direction.
Market indicators show that investment
decisions should be made on the strength
of the retail property and submarket under
consideration, not broader trends alone.
Deliveries, Absorption, and Vacancy
Dallas+Fort Worth Markets Combined, All Property Types
SOURCE: Transwestern, CoStar
Retail Rental Rates By Product Type
Dallas+Fort Worth Markets Combined
SOURCE: Transwestern, CoStar
$5
$10
$15
$20
$25
$30
15 16 17 18 19
All Retail Power Center Grocery Mixed -Use
New Retail Projects
Under Construction
PROJECT CITY SF
The Village at Prosper Prosper 944,863
Shops at Chisholm Trail Ranch Fort Worth 250,000
Lakeside Crossing Flower Mound 161,485
Living Spaces Frisco 148,000
Gates of Prosper (II) Prosper 122,000
North Frisco Village Frisco 103,000
6050 N Central Expressway Dallas 90,000
0%
1%
2%
3%
4%
5%
6%
7%
-0.5M
0.0M
0.5M
1.0M
1.5M
2.0M
2.5M
3.0M
3.5M
15 16 17 18 19
Deliveries Net Absorption V ac an cy
Q4 2019 | DALLAS
+
FORT WORTH | RETAIL MARKET
METHODOLOGY
The information in this report represents single-tenant, multi-tenant, and owner-occupied retail and mixed-use properties in
the Dallas-Fort Worth metropolitan area. Properties owned by a government agency are excluded.
CONTACT
Andrew Matheny
Research Manager
972.774.2529
andrew[email protected]
777 Main Street, Suite 1100
Fort Worth, TX 76102
2300 N Field Street, Suite 2000
Dallas, TX 75201
Copyright © 2020 Transwestern. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered
by Transwestern from various primary and secondary sources believed to be reliable. ǿٷַ, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any
responsibility for any inaccuracy contained herein.
OUTLOOK
Growth To Continue Driving Performance
The key to understanding retail in Dallas-Fort Worth is
understanding the region�s growth story.
Although online retailers capture a growing share of retail
trips, robust population and job growth brings a growing
number of trips that offset this smaller share. Population
growth will continue with about 140,000 new residents
added every year through 2025. Job growth is more difficult
to predict but will nevertheless continue positive gains at
twice the national average, or 40K-100K jobs per year.
New construction in high-growth suburbs will see the
strongest performance. Older properties in the right
submarkets—particularly those with robust multifamily
pipelines—will continue to offer opportunities to create
unique experiences that drive traffic to tenants.
Key Market Indicators
Submarket Inventory
Overall
Vacancy %
Direct
Vacancy %
Under
Construction
Q4 Leasing
Activity
Q4 Net
Absorption
12 Mo Net
Absorption
NNN
Rents
Dallas - All Retail
212,013,145
10,484,055
4.9% 10,769,382 5.1% 3,438,920 982,565
180,148
1,774,009 $17.62
Power Centers
25,599,780 966,477
3.8%
1,030,116 4.0% 132,500 39,914 (86,408) 36,763 $25.36
Grocery Anchors
9,458,181
366,581
3.9% 366,581 3.9% 0 1,600
(31,409)
80,335 $9.60
Mixed-Use/Lifestyle Centers
7,020,924 198,949 2.8% 202,058 2.9% 0 59,257 (274) (36,392) $30.96
Fort Worth - All Retail
101,948,966
5,832,669
5.7% 5,905,652 5.8% 1,029,743 574,930
129,495
222,720 $13.82
Power Centers
8,104,475 360,056
4.4%
360,056 4.4% 0 15,424 162,805 167,957 $26.24
Grocery Anchors
3,647,413
76,664
2.1% 76,664 2.1% 0 0
2,595
(257) $8.00
Mixed-Use/Lifestyle Centers
4,495,572 318,564 7.1% 321,783 7.2% 0 21,490 12,868 (72,870) $25.81
D+FW COMBINED
313,962,111
16,316,724
5.2% 16,675,034 5.3% 4,468,663 1,557,495
309,643
1,996,729 $16.33
Power Centers
33,704,255 1,326,533
3.9%
1,390,172 4.1% 132,500 55,338 76,397 204,720 $25.59
Grocery Anchors
13,105,594
443,245
3.4% 443,245 3.4% 0 1,600
(28,814)
80,078 $9.36
Mixed-Use/Lifestyle Centers
11,516,496 517,513 4.5% 523,841 4.5% 0 80,747 12,594 (109,262) $27.75
Forecast Of Retail Absorption, Population, And Employment
Yearly Increases
SOURCE: Transwestern, CoStar, EMSI
0
20 K
40 K
60 K
80 K
100 K
120 K
140 K
160 K
180 K
200 K
0
1.0M
2.0M
3.0M
4.0M
5.0M
6.0M
7.0M
8.0M
9.0M
10.0M
14 15 16 17 18 19 20 21 22 23
24
Net Absorption Population Growth J obs Added
