How is Retail Holding up in Texas?
Overall, the state of Texas has reported pent-up demand, resulting in elevated leasing activity, net absorption, and rent growth. The four largest metros in the Lone Star State, Austin, Dallas-Fort Worth (DFW), Houston, and San Antonio, hold more than two-thirds of the state’s population and see gradual compressions in retail vacancies. Occupancies in major markets Houston, Austin, San Antonio, and DFW are above 94 percent. San Antonio has the most undersized construction pipeline, with 706,021 square feet in development, followed by Austin, with 1,432,338 square feet underway. In comparison, Houston and DFW both encompass more than three million square feet in the pipeline. Substantial population and economic growth in each market will keep the retail segment on a firm footing.
New Developments in Texas
Two projects in Texas, one in Dallas and the other in Houston, received CoStar Impact Awards for their successful conversion from Sears department stores into new uses. The former Sears in South Dallas will soon host two outpatient medical facilities for a total of 150,000 square feet. Though Dallas is home to dozens of hospitals, this will be one of the two hospitals located south of Interstate 30 and be accompanied by apartments, offices, and entertainment. The other location in Houston was redeveloped into The Ion, a $120 million, 226,000 square foot “innovative hub” with office space, prototyping labs, and other amenities. Tenants include Chevron Technology Ventures and Microsoft.
