Gyms, Trampolines and Sport Courts Are Backfilling Texas Retail

Fitness and entertainment concepts are racing to backfill space shed by failed big-box retailers across Texas, keeping vacancy rates well below historic averages.

A string of major retail bankruptcies, including Party City, Joann, Big Lots and Conn’s, resulted in a 66 percent year-over-year increase in store closings nationally this year, according to Coresight Research. However, fitness centers and entertainment retail have been quick to fill space in Texas, contributing significantly to the state’s low vacancy rates.

The vacancy rate halfway through the year was lower than the 20-year historic average in Austin, Dallas-Fort Worth, Houston and San Antonio, according to Partners Real Estate. Houston had the highest vacancy at 5.5 percent.

In DFW, where the retail vacancy rate is 4.8 percent, compared to a historic average of 6.4 percent, Crunch Fitness, EoS Fitness and the Picklr had leased 115,000 square feet halfway through this year. Crunch has also leased almost 44,000 square feet in Austin and over 54,000 square feet in San Antonio.

Other fitness and play concepts include pickleball club Dill Dinkers, which leased 24,000 square feet in San Antonio; NRG Trampoline, which leased almost 47,000 square feet in San Antonio; Jumping World, which leased over 31,000 square feet in Houston; and Sky Zone, which leased 40,000 in Houston.

Meanwhile, grocery-anchored shopping centers are burgeoning to accommodate Texas’ population growth, dominating retail development.

Grocery store closures in Texas reflect local competition as much as national pressure, said Steve Triolet, senior vice president of research at Partners. Kroger and Albertson’s — and their subsidiary brands, Randall’s and Tom Thumb — took a blow when their merger was blocked last year. In addition, the immensely popular Texas grocery chain HEB has been expanding into their North Texas markets, creating more competition.