Battered D-FW shopping center sector looking much brighter
Thursday April 12, 2012
Dallas Morning News – by Steve Brown
How can you tell the North Texas economy has turned the corner?
One indicator I see is that the local shopping center market is definitely on the mend.
During the recession, retail real estate was one of the hardest-hit commercial property sectors.
No surprise that. Consumers headed for the bunker and clamped their wallets closed when economic conditions soured.
Even high-density urban areas were hit by a retail slowdown.
And with construction of new neighborhoods at a virtual standstill, plans for shopping centers in the suburbs were put on hold.
Retail construction in the Dallas-Fort Worth area last year was at its lowest level in more than a decade, with only about 1.6 million of space added to the local market.
The outlook for construction this year is much the same.
But there are unmistakable signs that the shopping center business is getting back to business.
Just this week, we got word that the landmark Preston Royal Village shopping center in North Dallas is being snapped up by a Florida-based real estate investment trust.
The deluxe shopping venue has been owned by the same family and their partners for more than 50 years and is expected to go for a head-turning price.
The pending Preston Royal sale follows last winter’s purchase of the Timber Creek Crossing retail complex on Northwest Highway. That new shopping center fetched more than $80 million.
Retail construction is also making a comeback, especially in close-in locations.
Developer Lincoln Property Co.’s purchase of the two corners of Gaston Avenue and Garland Road in East Dallas will bring the biggest retail project that area has ever seen.
“We think the timing couldn’t be better,” said Robert Dozier, Lincoln Property executive vice president.
The developer also plans to redo the historic Lakewood shopping center nearby.
And Lincoln is a partner with Dallas’ Retail Connection in the planned redevelopment of the big Village on the Parkway retail center in Addison.
Retail Connection just expanded its operations to Austin — the last major Texas market where the 9-year-old retail real estate services firm didn’t already have an office.
“We’re having a great year and are seeing a lot more deals,” said Retail Connection CEO Steve Lieberman.
If the first few months of 2012 are any indication, the D-FW shopping center market will definitely have more to brag about this year.
But it will take a reset of the area’s still-depressed homebuilding market before the retail market is fully back in the game.
New rooftops equal new shops — that’s still a given.
Fortunately for developers, the outlook for the North Texas homebuilding market is also a little brighter.