DFW Retail Leasing Activity Slowed In Q1
The consistently strong Dallas-Fort Worth retail market stubbed its toe in the first quarter as leasing activity stalled on coronavirus fears, CBRE said in its Q1 Retail MarketView study.
DFW leasing volume in Q1 dropped with positive retail absorption hitting a modest 166K SF, while occupancy dipped slightly to 94.2%, according to CBRE.
Because of a slowing economy in the final weeks of the quarter, only 42% of new DFW retail spaces were leased by April 1, CBRE said.
Comparatively, in the fourth quarter of 2019, the DFW retail sector absorbed approximately 942K SF and completed 669K SF of new product, CBRE reported at the time.
In fact, up until the latter part of the first quarter of 2020, the North Texas retail sector remained stronger than most with CBRE noting an increase in big-box retail absorption at the end of 2019 with many Class-A and B spaces infilled with fitness and entertainment concepts.
But with gyms, movie theaters, entertainment concepts and hospitality forced to close their doors on coronavirus concerns in the latter part of the first quarter of 2020, DFW retail now faces a bumpier ride.
But there is hope at the end of the tunnel for retail, CBRE says.
Even with CBRE expecting unemployment to double during the coronavirus crisis, the commercial real estate firm predicts a V-shaped recession and a quick recovery as early as the third quarter.
While small-business tenants have been the most impacted, with 15% to 80% revenue declines, CBRE brokers find landlords eager to come up with creative solutions, including delays in April rents or agreements in which tenants are paying only triple-net expenses during the pandemic.
