The need for home furnishings headline absorption as population and household gains drive demand in Dallas-Fort Worth retail market.

Vacancy rate at 5.0%. Eight months into 2022, overall vacancy in the DFW retail market has tightened to 5.0%, dropping 90 basis points from this time last year’s 5.9%. Availability is at 5.8%, down 140 basis points from 7.2% in August 2021. The difference between this figure and the vacancy rate reflects expected future move-outs. 6.3 million sq. ft. of leasing activity comprised of both new leases and renewals was recorded, while confident retailers are committing to more space, driving net absorption (move-ins minus move-outs) to 5.0 million sq. ft., up 73% year over year.

Average retail NNN asking rents remain elevated. Positive trends in leasing and absorption have driven average retail asking rents higher. The DFW metro NNN average asking rent is $17.74 per sq. ft., up 4.3% from $17.01 last year. Among the largest leases in 2022, At Home signed a 103,640 sq. ft. lease at Timber Creek Crossing, backfilling a space left vacant by JCPenney. Floor & Decor signed a 84,071 sq. ft. deal at Golden Triangle Mall, backfilling a vacant space left by Sears. Due to moderate construction and tightening space availability, rent growth is gaining momentum in Dallas- Fort Worth.

DFW housing market sees pause in transactions. The median sales price for a home in Dallas- Fort Worth is at $425,000, up 15% from July 2021. The number of existing homes sold in Dallas-Fort Worth saw a 14% rise year over year, and the number of active listings in the metro area reached nearly 15,000, which is up 81%. Mortgage rates are running from 5% to 5.5%. There are a lot of incentives that mortgage lenders are offering to ease the pain of the higher interest rates. Builders for new construction are also offering buy-down rates for buyers as an incentive.

Leta Wauson
Director of Research
[email protected]
tel 713 275 9618