Grocery Stores Behind Texas Retail Development Boom

The Dallas-Fort Worth retail market is thriving, largely due to the dominance of grocery-anchored shopping centers.

Developers are gearing up for another robust year, fueled by the success of grocers such as H-E-B, Kroger and Walmart, Bisnow reported. Nearly half of the 1.5 million square feet of retail space delivered last year was dedicated to grocery stores, according to Weitzman.

This momentum is set to carry forward, with a projected 2.7 million square feet of construction and absorption expected this year.

“Think about this: Our largest category is also our healthiest,” Weitzman’s Bob Young said. “Grocery-anchored retail dominates the market inventory with 495 shopping centers totaling 74.4 million square feet.”

Occupancy in grocery-anchored centers reached an impressive 96.4 percent last year, helping the Metroplex achieve an overall retail market occupancy of 95.1 percent.

Vacancies emerged from store closures by failed retailers like Conn’s and Big Lots, but the market’s supply-demand balance is strong.

Of nearly 200 million square feet of retail space, less than 10 million square feet were vacant at the end of the year — a sharp decline from the 17 million square feet of vacancies recorded in 2020.

The development of grocery-anchored centers is expected to dominate this year, with multiple stores planned, including big-box retailers and specialty grocers like Costco, Whole Foods and H-Mart. This silo of construction ensures that existing retail spaces remain highly sought after, with retailers showing a preference for pre-built properties over speculative developments.

The tight market can be attributed to population growth, especially in suburban areas, and restrained retail development, Young said.

“Our market today is tight enough and strong enough that any well-located vacancy won’t stay vacant for long,” he said.

DFW’s occupancy rate trails other cities in the Texas Triangle, but its sheer volume of inventory helps cement its position as a retail powerhouse.

Austin led the state with a 97 percent occupancy rate.

— Andrew Terrell