Hey. Yes. Welcome back. Today we’re gonna be, uh, taking a pretty deep look in the US commercial real estate market. Mm-hmm. Uh, using the MSCI real assets. Okay. US Capital Trends report Yeah. For February, 2025. Um, and we’re gonna be looking at it kind of through the lens of some analysis done by JP Morgan.

Okay, great. So, sounds good. Um, yeah, our, our sort of mission for this deep dive is to, uh, yeah, really pull out the key insights from this report, uh, so you can get a really clear understanding of what’s going on in the market, uh, um, without having to like wade through a lot of data. Yeah. Makes sense. So, uh, yeah, think of it as your, uh, your quick route to being really informed That’s cool.

About the CRE landscape. Cool. Um, jumping right into it, uh, the total sales volume. Okay. In US commercial real estate for February, 2025, hit $26 billion. Okay. Um, that’s, you know, pretty, pretty notable. 23% increase compared to, uh, the 21.1 billion that we saw in February of last year. Big jump. So, um, yeah. You know, at first glance it looks like kind of a big jump, right?

It does. Uh, but maybe we should dig into a little bit about what makes up Yeah. That 26 billion, let’s unpack that a little bit. Yeah. Because, uh, you know, a big thing that the report points out is, uh, these things called entity deals. Okay. Um, which totaled $4 billion in February, 2025. Mm-hmm. Um, and what’s interesting is there weren’t any in the same month last year.

Entity deals. Yeah. Yeah. Um, so for those of us who maybe aren’t super familiar with, uh, all the ins and outs of CRE Sure. Uh, why should we be paying attention to these when we’re trying to kind of gauge the temperature, right? Of like the commercial real estate asset market? Yeah. So, you know, that’s a really good question and it’s a really important distinction because when we’re typically talking about CRE transactions, we’re talking about.

Uh, individual properties like office buildings, right. Retail centers being bought and sold. Right. Um, but entity deals, um, often involve the sale of like a whole company or a large collection of properties. Yeah. Under like a single corporate structure. And these can happen, you know, as a result of, uh, you know, company strategies mm-hmm.

Mergers and acquisitions. Ooh. So, um, you know, whereas a regular sale Yeah. Would tell us about demand for like a certain type of building. Yeah. You know, entity deals might just reflect a company like restructuring its holdings. Okay. Which doesn’t necessarily mean that more people wanna buy office buildings.

I see. So to really get a clear picture of how individual properties are trading. Right. You know, analysts often separate these out. Okay. That makes a lot of sense. Yeah. It’s like a, yeah. Like the difference between looking at how many individual cars were sold versus the sale of a whole like rental car company.

Right. Exactly. Right. Yeah. Yeah. So if we take that $4 billion in entity deals out of that February 20, 25 figure, yeah. What does the year over year growth and transaction volume look like then? Yeah, so when you exclude those entity deals, uh, the year over year growth comes down to a more modest. Okay. But still positive.

Yeah. 4.1%. So this really highlights for you. Yeah. You know, why it’s so important to look beyond just the, you know, the top line numbers to understand the real kind of, uh, dynamics that are happening. Yeah, absolutely. It’s about kind of like peeling back the layers and seeing what’s really happening under there.

Yeah. Um, so the report also mentions, uh, something that’s maybe not always the most, uh. You know, eye catching headline, but Right. Important nonetheless, which is revisions Yeah. To data from previous months. Yeah. Um, it seems like those initial numbers we see aren’t always totally set in stone. That’s right.

And that’s actually a pretty normal part Yeah. Of how market data gets reported. Okay. You know, initial figures are often based on early information mm-hmm. And they get refined as more complete data becomes available. Yeah. So what this report shows is like. Modest upward revisions for recent months. Okay.

Which generally suggests that the initial picture was maybe a little bit understated. Okay. Uh, are there any specific revisions that sort of jump out at us? Yeah, so the transaction volume for January, 2025. Uh, again excluding entity deals. Right. Saw a pretty big upward revision of 12.6%. Wow. Um, so that brings the total for January to $32.6 billion, which is a pretty robust 20.3% increase.

Yeah. Compared to January of last year. Wow. Okay. Um, interestingly, the figures for December and November, 2024 are now pretty much finalized with less than a 1% upward revision. Okay. So it seems like the more recent the data Yeah, the more it’s subject to change. For sure. For sure. Um. Okay. So let’s take a step back and look at kind of the bigger picture.

Okay. Um, how does what we’re seeing in February and the beginning of 2025 sort of stack up against Yeah. The trends we saw? Yeah, good. Quickly at the end of last year, um, so according to MSCI, real assets, uh, the fourth quarter of 2024 showed a really, really strong Okay. Surge in US transaction volume, excluding entity deals.

Okay. Um, with a notable 47.5% year over year growth. Wow. That’s a, the big jump. That’s a huge jump. Yeah. Um, and the report mentions that. This aligns with what some of the big CRE service companies were reporting. That’s right. Like, does that Yeah. Yeah. Yeah. JP Morgan highlights that revenue reports from companies like JLL Okay.

Indicated a similar, uh, strong performance in their business segment. Yeah. Uh, with JLL reporting a plus 51% year over year increase. Okay. So it sounds like. And so that kind of agreement across different sources makes the data seem Yeah. It really strengthens the credibility Yeah. Of the MSCI data. Okay, cool.

So a strong finish to 2024. Yeah. Um, now bringing it back to the start of this year. Yeah. Um, the report gives us an initial year to date growth figure. Right. For January and February of 2025. Right. What’s that looking like? So based on the data we have for the first two months, uh, the initial year to date growth comes in at plus 13.2%.

Okay. Um, so that’s a positive start, but yeah, it is important to keep in mind those historical upward revisions. Right, right. Those adjustments. Yeah. Um, I think the report mentioned a, a potential 30% upward swing between the initial and the finalized figures. Yeah, that could, I’m really, that could really change things.

Yeah. Yeah. If we just apply like a 1.3 x multiplier mm-hmm. Like the report suggests based on historical patterns. Yeah. Um, the year to date growth for January and February could potentially jump to around plus 37.3%. Wow. Okay. Year over year. Um, and similarly, February’s growth excluding entity deals might have been closer to plus 35.3%.

Yep. Year over year. Yeah. Now this is just a projection, right. Based on past trends. Got it. So it’s something to watch. Yeah, for sure. As more finalized data comes out. Okay. So the, the initial 13.2 is good news, but the reality could be, could be even better. Much, much stronger. Yeah. Um, now JP Morgan also offers their own kind of take on this, right.

Um, mentioning their internal models Yeah. For revenue growth in CRE service companies. Right. Um, what are they anticipating? So their internal models are projecting a more conservative plus 12% year over year growth. Yeah. In global capital markets revenue for those companies. Okay. In the first quarter.

Right. Um, they point out that this is a global figure, right? So it could be affected by slower activity in regions outside the US Yeah. And also by some, you know, one-off items in the financial reporting. Right. But, uh, it’s like a slightly more cautious. Outlook, but Yeah. Still in positive territory. Yeah.

Yeah. The report specifically says that they’re no less encouraged. Okay. By the initial US transaction data. Yeah. Even though they have that more, you know, tempered global forecast. Yeah. It sounds like they’re acknowledging the strong US data. Yeah. But they’re also kind of tempering it with the broader global picture.

Exactly. Exactly. And they also include, yeah, a really interesting real world anecdote. Yeah. Um. About a recent breakfast with C-B-E-C-E-O, Bob Tic. Oh, okay. That sounds like it could offer some Yeah. Interesting. On the ground. Yeah, exactly. Insights. Yeah. So he indicated that he’s seeing a narrowing of the bid ask spread in the capital markets.

Okay. Which basically means that the difference between the price sellers want for properties, right. And what buyers are willing to pay is getting smaller. Okay. Um, and this is often a sign that, you know. More deals are likely to happen. Think so because buyers and sellers are kind of finding common ground.

Yeah. That’s a really positive sign. Yeah. Suggesting that some of that uncertainty that we’ve been seeing, right. Is starting to maybe resolve a little bit. Absolutely. And maybe even more noteworthy was his comment about interest rates. Okay. He suggested that interest rates are appearing to be less of an obstacle to transactions.

Okay. And he even indicated that the market could potentially absorb. Wow. A 10 year treasury yield. Okay. Climbing up to 5%. That’s pretty significant. Yeah. That’s a big statement. Yeah. You know, it implies that there’s a greater willingness and ability for both buyers and sellers, right, to make deals. Even if rates are a bit higher than we’ve seen recently.

It seems like the market might be. Kind of adjusting Yeah. Finding its footing in this new rate environment. Yeah, for sure. And you know, hearing this kind of sentiment from someone like A-C-B-E-C-E-O Right. Who has, you know, direct insight into the market Right. Really adds a valuable like qualitative layer Yeah.

To all the quantitative data we’re seeing in the report. Yeah, for sure. Okay. So we’re seeing some generally positive signs in the overall transaction. Volumes. Yeah. Um, we’re hearing some encouraging things from industry leaders. Yeah. Uh, but let’s break down that February, 2025 transaction volume by specific.

Property sector. Okay. Um, were there any surprises in terms of like, which property types saw the most activity? Yeah, there were definitely some interesting dynamics at play. Okay. And likely some surprises. All right. Let’s go through ’em one by one. Okay. Uh, which one saw the biggest jumps in transaction volume?

So leading the way by a pretty big margin was the retail sector. Yep. Uh, which. Posted a pretty remarkable plus 105% year over year growth. Wow. Okay. Um, and then following that, uh, maybe surprisingly, was the office sector with a substantial plus 55.2% increase. Wow. You know, this really challenges the narrative Yeah.

Around these sectors. Yeah. You know, it suggests that there’s still considerable activity Yeah. And maybe even some renewed interest in these areas. Wow. So retail more than doubled. Yeah. And office, which has kind of been, you know, really scrutinized lately. Yeah. Saw a huge jump. Huge jump. That’s, that’s pretty unexpected I think.

Yeah. For a lot of people, for sure. Um, what about the other property types? Yeah, so hotels also showed really healthy growth at plus 20.2%. Okay. Um, apartments saw more modest increase of 6.7%. Okay. Um, and then bringing up the rear was the industrial sector. Okay. With a very, very slight. Plus 0.5%. It’s a real mix there.

Yeah. Um, it seems like the story of struggling retail and office Yeah. Might be shifting. It might be, at least in terms of transaction activity. Yeah. Um, and industrial, which has been, uh, you know, such a strong performer. Right. Uh, you know, really didn’t grow that much, not so much in February. Yeah. Um, so that’s kind of a.

You know. Interesting. Yeah. It underscores the nuanced Yeah. Nature of the market. Yeah. You know, we can talk about broad trends in CRE, but the actual performance mm-hmm. Can be very different. Yeah. Depending on the specific type of property. Right. Okay. So we’ve looked at the volume of transactions. Yeah.

Let’s turn our attention to pricing, specifically cap rates. Okay. Uh, what did the report tell us about? Average cap rates in February, 2025. So the average cap rate for all CRE transactions in February was 6.53%. Okay. Um, and that’s a very, very slight increase. Yeah. Of three basis points compared to the previous month.

Okay. And remind us again what a basis point is. Yeah. So one basis point is one, 100th of a percentage point. Okay. So it’s a very small change. Tiny, tiny change. Yeah. Um, and what about the cap rates for assets that actually traded in February? Yeah. Broken down by those individual property sectors. Sure. So looking at the average cap rates specific for assets transacted in February.

Yeah. We see, um, office cap rates average 7.72% Okay. Which was an increase of 12 basis points month over month. Okay? Um, industrial cap rates came in at 6.15%, showing a tiny decrease of three basis points from January. Right? Uh, retail cap rates. Average 7.16% up by five basis points month over month. Okay. Um, apartment cap rates were at 5.3 B percent.

Okay. Reflecting a decrease of 10 basis points compared to the previous month. Okay. And finally, hotel cap rates averaged 8.44%. Okay. Which was an increase of 18 basis points month over month. Wow. So we’re seeing some movement in both directions here. Yeah, for sure. Um, you know, the increases in office and hotel Yeah.

Along with the decreases in apartment and industrial mm-hmm. Uh, seem to kind of reflect those, you know, differing levels of demand. Yeah, yeah. Risk in those markets. Yeah. And that jump in hotel cap rates is pretty notable. Yeah, it is. Yeah. And the slight increase in retail cap rates mm-hmm. Despite the strong transaction volume growth in that sector.

Yeah. Is another interesting thing to think about. Yeah, for sure. You know, it suggests that while more retail properties are trading Yep. Pricing might be adjusting a bit. Okay. And then on the other hand, the continued compression Yeah. In apartment cap rates mm-hmm. Could signal, you know, continued strong investor demand in that sector.

Okay. Great. Um, so to kinda summarize everything we’ve covered today, yeah. February, 2025 saw a big overall increase Yeah. In commercial real estate sales volume. It did. Um, but that was really driven by. Those entity deals. Yeah. When we look at just the transactions of individual assets, right. Uh, the growth was more.

Modest, but still positive. Yeah. Um, and I think what’s really fascinating is that the revisions of the data from previous months Yeah. Suggest that those positive trends might actually be even stronger. That’s than what was initially reported. It’s very possible. Um, and then we saw a real mix across the different property sectors.

Yeah, for sure. Uh, retail and office led the way. Yeah. In terms of that year over year transaction volume growth. Yeah. Which is a surprise to some. Yeah, I think so. Given, you know, the recent conversation around those sectors. Yeah, for sure. And then cap rates showed, you know, yeah. Some adjustments, varying adjustments across the different sectors.

Yeah. Which gives us kind of a glimpse into how investors are, right. Viewing those different property types. Exactly. Um. I guess, you know, taking all of this together and considering these trends. Yeah. Um, especially that narrowing bid ask spread, and the suggestion that interest rates might be less of a barrier than we thought.

Right. Um, what does this tell us about where the US commercial real estate market is headed? Yeah, that’s the big question. Yeah. Right. What should we all be thinking about? You know, this data, along with the insights from industry leaders makes you wonder, are we seeing a real shift? Yeah. In market sentiment and activity.

Yeah. You know, that increased willingness to transact, even with some adjustments in cap rates, right. Suggests that maybe there’s a rise in confidence. Okay. Um, but you know, you have to look beyond. Yeah. Just. Transaction volume and cap rates. Right. To really understand what’s going on. Mm-hmm. You have to look at like the underlying health of each sector.

Yeah. Things like occupancy rates. Okay. Rent growth. Mm-hmm. And the overall economic conditions Yeah. That are driving demand for different types of commercial space. Yeah. Um, you know, so. What other unexpected factors might emerge Yeah. In the coming months. Yeah. That could either boost or, you know, slow down this apparent increase in activity.

Right. That’s the big picture to keep in mind. Yeah. Some things to think about. Yeah. Awesome. Well thanks for, uh, walking us through all that. Yeah, of course. Really appreciate it. Happy to do it. And uh, yeah, we’ll be back next week with another deep dive. Sounds good.

 Welcome to the deep dive. Everyone we’re here with a fresh look at the commercial real estate market brought to you, of course, by Eureka business group. And we’re kicking things off with, well, some really exciting news, especially for those of you keeping an eye on retail in the DFW area. Of course, you’ve got it.

We’re really diving deep today into the CBRE 2025 global investor intention survey. It’s a March, 2025 report, and it’s really insightful, really gives us a valuable look at the global picture of where’s the money going. And commercial real estate that is. And for us here at Eureka Business Group, we love to use these global insights.

to really get a good grasp on what’s happening locally, right here in our DFW market, when it comes to opportunities and trends. You know, I completely agree. I mean, this survey is pretty comprehensive, right? They polled over 1, 400 investors all across the globe, the US, Europe, Asia Pacific, back in late 2024.

That’s a pretty broad view of what investors are thinking and feeling. And of course, that has major implications for what we can expect. Right here in Dallas Fort Worth. So today our goal is simple. We want to take all these global insights and boil them down to what matters most for you, if you’re looking at investing in DFW commercial real estate, with a special lens, of course, on the retail sector.

Sounds good to be. So let’s start big picture, big picture stuff. What’s the overall sentiment? Well, across the board, the US, Europe, Asia Pacific, we see a clear majority, clear majority of investors planning to at least maintain, if not increase. The real estate acquisitions going into 2025 compared to last year.

Now, what does that tell us? It tells us there’s this underlying confidence globally in real estate as an asset class. Yeah. I mean, that’s a pretty strong endorsement, wouldn’t you say? And you know, the report does point out that there has been a little bit of an increase in caution among us and European investors since they took the survey probably has something to do with.

Expectations around interest rate cuts, maybe not as many people were hoping for, but it’s super important to remember that capital is still flowing into U. S. real estate. We’re seeing it. CBRE is seeing it. More bidder activity. You know, it’s something we’re definitely observing here in DFW. It’s happening.

Absolutely. And if we, if we turn our attention to Asia Pacific, we see an even rosier outlook. Investors there are pretty convinced that interest rates have peaked. And they’re, they’re ready to jump back in, ready to deploy capital after things were a little slower. And, and you know what, Japan, Japan is a really interesting case.

The report highlights how they’re actually anticipating. Rising rents, even though monetary policy is still pretty tight. So what does that tell us? Strong demand. Very strong underlying demand for real estate in Japan. I love how these regional nuances come into play. It’s fascinating. But let’s, let’s shift gears a bit.

Talk about what’s driving these investment decisions. The survey reveals some interesting regional differences. For instance, U. S. and European investors, their top reason for upping their capital allocation is favorable pricing. So how does this actually play out, especially for someone looking at acquisitions here in Dallas Fort Worth?

Well, in the DFW market, that phrase, favorable pricing, often boils down to cap rates, black rates or capitalization rates, shifting and certain, retail subsectors. This metric essentially tells us. About the potential return on an investment and what we’ve observed is these rates going up in some pockets of the market meaning Acquisition prices are looking more appealing compared to the income those properties are bringing in so for investors Looking for specific yields in our local retail market.

Well, this creates some pretty compelling opportunities It’s all about understanding those local dynamics and that’s what makes this so valuable now Asia Pacific. What’s fueling their investment engine? Well, for them, the big driver is expectations around lower debt costs, which of course ties into the idea of interest rates easing in that region.

But across the board, across all regions, we see stabilizing, maybe even decreasing interest rates and improved expected total returns. These are the factors really motivating investors to, well, to keep their eyes on commercial real estate. Yeah. And these economic indicators certainly suggest that it might just be the right time.

To think about strategic investments, don’t you think? I’d agree with that. Okay, so let’s dig into preferred investment strategies now. The report, it clearly shows a strong preference for value add across all three regions. Now, for some of our listeners, they might not be as familiar with this term. So can you unpack it a bit?

What does value add actually mean? And why is it so hot right now, especially in the DFW retail world? Sure, happy to. So think of it this way, value add. It’s all about finding properties that aren’t living up to their full potential. Maybe they’ve got management issues. Maybe the design is outdated. Maybe the tenant mix just isn’t right.

Whatever the reason, you see an opportunity to step in. Make some strategic improvements. Change things up operationally. And boost the value, boost the returns. Now in the DFW retail scene, this could mean buying a shopping center, great location, but it needs some love. Maybe modernize it, bring in some fresh tenants that really resonate with the local community.

Or even, you know, reconfigure the space to create something new, something experiential, or cater to those service based businesses that are in high demand. And the current climate, well, with prices adjusting, it makes these value add projects. Really, really appealing. The potential for returns is strong.

So essentially, an investor here in DFW might come across a shopping center. High vacancy rate, but it’s in a growing suburb. They see that potential, invest in renovations, attract a big anchor tenant, and boom, the whole property is revitalized. Value skyrockets. That’s the idea. It’s happening all over DFW.

Strategic repositioning. Now, the report also highlights Core Plus As, a popular strategy. In the DFW retail context, think of Core Plus As, taking a stable shopping center. Good location. And then, you make some tweaks, maybe a few upgrades. Attract a couple of key tenants, just to give it a little boost, in terms of income and appeal.

You know, it’s pretty remarkable that even with the, you know, the perceived risk being a bit higher in Europe, Value added still king really shows you that active management, it’s a powerful tool for driving returns and the fact that Asia Pacific investors, they’re also looking at core and core plus after the price corrections.

It just reinforces the idea that real estate fundamentals are solid. Yeah, there’s this underlying belief that well located properties, they’ll, they’ll continue to appreciate. So let’s talk sectors, preferred investment sectors. This is where it gets really interesting, especially for our DFW retail folks.

Yeah, absolutely. This is the juicy stuff. Now, globally, multifamily and industrial and logistics are leading the pack, that we get it, right? Demographics, housing affordability, e commerce, it’s all playing a role. But what about retail? How does retail fit into this picture, especially for U. S. investors? Well, this is a big one.

A big takeaway for anyone interested in the DFW market, the CBRE report, it specifically points out an uptick, a noticeable uptick in us investor interest in retail assets. And this, this surge in interest is directly tied to. Increased leasing activity that CBRE has been seeing. So for us here in Dallas, Fort Worth, this is a major positive signal.

It tells us that confidence in the retail sector is coming back. Tenants are actively looking for space and they’re signing leases. I mean, that is. Fantastic news for the DFW retail market, increased leasing activity. It means businesses want to be here. They want to set up shop. They want to grow. And that translates into more investment opportunities, potentially higher property values.

It’s a good sign. And, you know, the report also mentions an uptick in us investor interest in office properties. Yeah, they did. However, you know, office it’s a bit more complicated, it’s more nuanced. It really depends as a specific market. And the class of property you’re looking at. True. It’s something we’re keeping a close eye on here at Eureka Business Group and DFW.

Yeah, makes sense. Now for Europe, residential. Residential is actually the top dog now. It’s overtaken industrial and logistics, reflecting their own unique market dynamics. And in Asia Pacific, well, industrial logistics still reign supreme. But there’s a growing appetite for multifamily. It’s on the rise.

So we see these global preferences and they give us this broader context. But for our listeners here in DFW, the key takeaway is this. The U. S. market, and potentially our local area, is witnessing a resurgence of interest in retail from investors. So let’s talk about some of the differences, the divergent views that the report highlighted, especially when it comes to the office sector.

Yeah, there’s a definite contrast in how investors are viewing office. You know, U. S. investors are a bit less enthusiastic compared to their counterparts in Europe and Asia Pacific, and this likely stems from those high office vacancy rates that we’ve been seeing. Yeah. It’s definitely a trend we’re tracking closely here in DFW.

Makes sense. Now, European investors, when they are considering office, they’re laser focused, on prime. High quality properties, it’s all about quality over quantity, it seems. And in Asia Pacific, well, even though some areas have high vacancy, investment in office It’s actually picking up. Why? Well, a few factors are at play.

More people returning to the office, steady leasing demand in certain segments, and some price adjustments. Really highlights how crucial it is to understand those local market nuances, even when we’re analyzing global trends, right? Now, let’s touch on alternatives, alternative investments. The report had some interesting insights there.

It did. And what’s interesting is there wasn’t this clear consensus on the most sought after alternative sectors. It really varied by region. U. S. investors, they’re still showing love for niche areas like self storage and industrial outdoor storage, which weren’t really top picks elsewhere. What’s even more interesting is over half Over half of U.

S. investors said, nope, not interested in alternatives this year. So maybe there’s this refocusing happening back to the core asset classes, like you guessed it, retail. It’s a really intriguing point. Maybe a shift back to the familiar, the core sectors in the U. S., so Europe and Asia Pacific. What about their alternative preferences?

Well, European investors, they’re really into data centers. No AI boom happening. And also student living. Makes sense. And Asia Pacific, similar story, data centers are hot and health care related assets are getting a lot of attention, reflecting the growth of the digital economy and demographic shifts in those regions.

So diverse landscape for alternative investments, but with a potential refocus on core sectors. Like retail in the U. S. So let’s talk rivers and challenges. What are investors keeping an eye on? What are they worried about? Well, for U. S. investors, the big elephant in the room is interest rates. Long term interest rates.

They’re high. They’re volatile. And that creates a lot of uncertainty, especially when it comes to financing commercial real estate deals. Definitely something we’re monitoring closely here at Eureka Business Group. Financing is a critical part of the equation. So Europe and Asia Pacific, what are their main concerns?

They’re more worried about geopolitical risks. Understandably so. Given what’s happening in the world, but the report also it mentioned some other potential challenges things that could impact investment activity across all regions like mismatches in pricing expectations between buyers and sellers Operating expenses are going up labor and construction costs are rising and then there’s that lingering uncertainty About interest rates and the possibility of an economic slowdown A lot to think about for anyone’s considering an investment.

So let’s tie it all together. What’s the overall market outlook according to CBRE? And what does it all mean for our DFW retail market? Well, CBRE, they’re predicting a continued recovery for U. S. investment sales volume in 2025. They’re projecting an 8 percent increase, and they emphasize that it’s the strong U.

S. economy, especially job growth. That’s driving these positive real estate fundamentals. And this is particularly relevant for DFW. Our economy is robust. It’s attracting businesses. It’s attracting people. No doubt about it. DFW’s economic and job growth has been a huge factor in the success of our commercial real estate market.

Exactly. Now the report also forecasts growth in investment activity in Europe. They’re looking at 15, 20 percent and Asia Pacific. So it’s important to keep that global context in mind. And I love this quote from Kevin Ossoff. He’s the America’s president of investment properties at CBRE. He said capital continues to gravitate towards real estate investment in the U.

S. Despite higher for longer interest rates, we see signs of a healthy economy, supporting improved real estate fundamentals with more bidder activity every month. So even with the interest rate concerns. There’s this positive momentum. Yeah, I mean, that quote really sums it up. It’s encouraging. And what about those value add strategies?

How do they tie into the DFW retail landscape? What are the opportunities there? Well, it tells me that there’s going to be this continued interest in acquiring and redeveloping retail spaces here in DFW. It’s about meeting the needs and preferences of today’s consumers. Investors will be looking for properties where they can make strategic improvements, reposition them and unlock that hidden value.

Right. And let’s not forget that key finding from the report, the uptick in investor interest, specifically in U. S. retail, fueled by that increased leasing activity. I mean, that’s a pretty clear positive sign for the DFW retail market, wouldn’t we say? Absolutely. I’d say so. When we look at these global trends and combine them with the U.

S. specific data, it paints a very optimistic picture for strategic investment in DFW commercial real estate. You know, it’s amazing how these global trends connect to our local market. So, let’s recap. We took a deep dive into this CBRE report. And despite some caution, due to those interest rate uncertainties, the overall sentiment among global investors that it’s commercial real estate is largely positive.

And for our listeners, here in Dallas Fort Worth, the key takeaway is this, there’s a renewed interest in the U. S. retail sector. And that has a direct impact on our local market. Positive impact. Yeah, I think that’s a great summary. The current environment, it really does present some unique benefits for those looking to invest in commercial real estate.

Especially when you consider the potential for more favorable pricing on acquisitions, the attractive opportunities that come with those value add strategies, and that encouraging uptick. In leasing activity, in the retail sector, it’s all pointing in the right direction. And that’s where Eureka Business Group comes in.

We’re here to help you navigate the Dallas Fort Worth commercial real estate market with our specialized focus on retail. So if you’re ready to explore these opportunities and leverage our expertise, don’t hesitate to reach out. We’d love to hear from you. You know, based on, I think we’ve discussed today, these global investor trends, the resurgence of interest in U.

S. retail, I really believe. That the Dallas Fort Worth commercial real estate market, especially the retail segment, it holds tremendous potential for those who are ready to make strategic investments. It’s an exciting time to be in DFW real estate. So here’s a final thought for you. As you go about your day, consider this with global investors signaling continued activity and the U.

S. retail sector regaining strength. What unique opportunities might be emerging right now within the Dallas Fort Worth landscape? For those who are ready to seize the moment, that’s something to ponder. And with that, thank you for joining us for this commercial real estate briefing. Brought to you by Eureka Business Group.

 Welcome back everyone to another deep dive into commercial real estate news. Yeah, yeah. Curated, especially for our retail investors here in the DFW market. And as always, we’re brought to you by Eureka Business Group, DFWs Retail CRE Specialists. So let’s jump right into it. Um, you know, recent articles and research are painting a pretty vibrant picture for retail and DFW.

Yeah. You know, it’s interesting to see DFW kind of buck some of those national trends. You know, while some areas are seeing a bit of a slowdown, DFW multifamily sales actually picked up steam in late 2024, even exceeding the previous year’s numbers according to CoStar data. That’s right. And you know, this strength is really concentrated in areas like East Dallas, Arlington and the Uptown Park Cities area.

Yeah. And for retail investors, this is great news because more multifamily development equals more rooftops. Right. And more rooftops equals more potential customers for those retail businesses. Exactly. And you can really see this connection playing out in the construction pipeline. Yeah. The Coaster data shows that suburban retail construction is really leading the way in DFW.

You know, since the last recession. Retail construction has been steadily increasing, and these new developments are really strategically placed, you know, to serve these growing communities with a mix of kind of essential and convenient and even experiential retail options. Speaking of thriving communities, let’s head north of Dallas to Collin County.

Yeah. It’s really become a retail powerhouse and is projected to be one of the fastest growing counties in the nation in 2025. Yeah, Collin County is really interesting. You know, it’s this blend of economic opportunity and a high quality of life, right? And it’s really attracting people to areas like Plano and Frisco.

Um, and, you know, some are even calling it DFFW, uh, recognizing those suburban areas as really significant economic hubs now. And this growth isn’t just about attracting residents. It’s about attracting major employers too. Exactly. For example, Siemens recently invested 1 billion in a manufacturing facility in Fort Worth.

Wow. A project that’s expected to create 480 new jobs. That’s a great example of how a robust local economy really fuels that retail sector. So those 480 new jobs potentially mean 480 families needing goods and services. Right. Increasing demand for retail spaces and making Collin County an attractive area for retail investment.

But location is only one piece of the puzzle, right? Strategic investment is just as crucial in today’s, you know, dynamic market. Oh, absolutely. So let’s take a look at Blackstone. Okay. They’re one of the world’s largest real estate investors. Yeah. In a recent interview, Ken Kaplan Blackstone’s head of real estate really emphasized the strength of grocery anchored neighborhood retail centers.

It’s interesting why Blackstone is attracted to those centers. Right. Kaplan pointed out that people consistently need groceries. You know, regardless of the economic conditions. Yeah. It’s a fundamental need that provides a stable income stream for investors. Yeah. Especially appealing in today’s kind of uncertain economic climate.

Right. And Blackstone isn’t just talking the talk. Their walk in the walk, they acquired over $4.3 billion in grocery anchored centers. Wow. Demonstrating their strong belief in that sector. In a market like DFW with its robust population growth. Yeah. This focus on grocery anchored retail becomes particularly attractive for investors seeking stable long-term returns.

That’s a great point. You know, it’s not just about jumping on. The latest trend, it’s about understanding those underlying fundamentals that drive value in a market like DFW. But Blackstone isn’t just sticking to traditional retail models either. They’re embracing what we call experiential retail, which focuses on creating destinations that offer more than just products.

Yeah, this is where things get really interesting. Right. Experiential retail is about, you know, creating an experience. Yeah. A place where people want to spend time, not just their money. Right. Dining entertainment, immersive experiences, all rolled into one. Yeah. A great example of this is Level 99, a massive entertainment center developed by Blackstone in West Hartford, Connecticut.

That’s interesting. It’s a 50, 000 square foot complex with everything from dining and gaming to immersive art installations. Wow, I’m fascinated by how Blackstone is adapting to these changing consumer preferences. Right. You know, they’re moving beyond those traditional retail spaces and creating these dynamic and engaging environments to attract a wider audience.

Exactly. This is such a crucial strategy for success in today’s evolving retail market, and it’s something investors in DFW should be paying attention to. So what does this mean for our DFW retail investors? Well, There’s a real opportunity to incorporate these experiential elements into their retail spaces.

Right. To attract and retain customers. Absolutely. But it’s not just about replicating what’s being done elsewhere. It’s about understanding the unique needs and desires of that local DFW community. Right. It’s about creating experiences that resonate with DFW residents making them want to come out and spend time.

Yeah. Ultimately driving foot traffic and sales for those retail businesses. Exactly. This attention to local nuances is what sets successful investors apart. For sure. And let’s take a quick look at some national trends that might be on your mind. Okay. First up, inflation. Yeah. The latest report from the Labor Department is encouraging U.

S. annual inflation edged lower in February to 2. 8 percent. Okay. Down from 3 percent in January. So this moderation is primarily due to easing energy prices. Right. However, it’s worth noting that shelter costs, which include rent, are still a significant factor accounting for roughly half of the overall inflation rate.

That’s right. And while there’s no immediate recession on the horizon, many analysts are predicting a slowdown later this year. Right. And this potential slowdown is mainly attributed to ongoing trade tensions between the United States, Canada, and Europe. Right. This situation is definitely worth watching.

Yeah. On one side, we have President Trump’s negotiation strategy of imposing tariffs on various goods. Right. And on the other, Canada and Europe are retaliating with their own tariffs. This back and forth is creating uncertainty in the market. Makes sense. If these trade disputes continue to escalate, we could see a more substantial economic downturn than initially anticipated.

Right. However, it’s important to remember that DFW has a history of resilience, and has often outperformed national trends during economic downturns. Absolutely. DFW’s diversified economy. You know, it has strong job growth and robust population growth, and those all help to kind of mitigate the impact of those national and global economic fluctuations, and that underlying strength makes DFW a much more attractive market for investors compared to other areas that might be more susceptible to those fluctuations.

Let’s shift gears now and talk about office real estate. Okay. The office sector has been a hot topic with many wondering if the shift to remote work is here to stay. Right. Recent data from Coast Guard shows that office attendance has actually reached a post pandemic high. Interesting. U. S. office attendance for 10 large cities Average 54.

5 percent of pre pandemic levels for the week ending March 5th. So this recent peak comes as large companies are ramping up those in office work requirements and scaling back on those remote and hybrid arrangements. Exactly. So what does this mean for DFW? Well. It suggests that the office market is far from dead.

Right. Companies still see value in having employees work together in person. Right. At least part of the week. Yeah. And this return to the office has positive implications for that surrounding retail environment. Right. More people working in offices translates to increased demand for lunchtime eateries, coffee shops, and other retail services.

That catered to that office crowd. Let’s look at some specific examples of how this is playing out in DFW. Okay. K L N orthodontics. Okay. A digital technology firm specializing in orthodontic innovations is moving its growing North Texas headquarters to an office building in Richardson, Texas. Okay.

They’re leasing 24, 850 square feet at 1703 North Plano road. Wow. And plan to invest almost two million dollars in tenant improvements. That’s a big investment. This move is expected to create over a hundred new jobs over the next five years. That’s great. And here’s an exciting twist. The city of Richardson is offering KLON a hundred thousand dollar grant in exchange for their investment of at least 1.

4 million dollars in its new office in the innovation quarter. That’s a great example of how local governments are actively working to attract if nesses and stimulate economic growth. Yeah. Which ultimately benefits the entire DFW region, including that retail sector. Another interesting development in the DFW office market is Care.

com relocating its Texas headquarters from Austin to Dallas. Oh wow. They’ll occupy 14, 000 square feet at One West Village, an 18 story office tower at 2801 North Central Expressway. This move is significant because Dallas Fort Worth ranked number three in North America for high tech job growth between 2022 and 2023, according to CBRE.

Right. This influx of tech talent is a positive sign for the DFW economy. Yeah. And could create new opportunities for retail businesses that cater to this demographic. Absolutely. Care. com’s decision to relocate to Dallas really highlights the city’s growing reputation as a hub for tech talent and innovation.

And it’s not just tech companies making moves. Telecom companies are also expanding their footprint in DFW. Oh, interesting. 46 Labs, a telecom and connectivity company, is expanding its presence in downtown Dallas. Okay. They’re taking over part of an office previously occupied by Sam’s Club at Factory 603 on Munger Avenue.

This move will more than double 46 Labs footprint, demonstrating their commitment to growth and innovation. In the DFW market, what’s interesting about this is that 46 labs is relocating from a smaller space in the historic market street building. Also in Dallas is West End, right? This area is a turn of the century warehouse district that’s experienced a revival recently becoming a hub for technology and innovation.

Yeah, 46 labs decision to stay in the West End. Right? End shows the area’s appeal as a vibrant and creative district that’s attractive to businesses. Right. This continued investment in the West End further solidifies its position as a key area within the DFW market. And let’s not forget about the industrial sector’s connection to the broader economy and its potential influence on retail trends.

Right. Ambrose, the industrial developer we mentioned earlier, is investing significantly in Build to Suit. Properties for Amazon. Yeah, and this has a local connection. Siemens recently opened 190 million electrical equipment manufacturing facility in Fort Worth. This state of the art facility located at 7200 Harris Legacy Drive will produce electrical equipment for data centers, a rapidly growing sector.

Interesting. This project is expected to add about 480 new jobs to the Fort Worth area. That’s huge. You know, this kind of industrial growth can have a spillover effect, stimulating demand for related services and consumer goods, ultimately benefiting the retail sector. So we’ve covered a lot of ground here, from local developments to national trends.

It’s clear the DFW retail market is dynamic and full of opportunities. But to help you navigate this landscape, let’s dive deeper into some specific insights from industry experts. That’s good. We’ll be back after a quick break. All right, we are diving back into DFW retail real estate, uh, with, you know, expert advice straight from the source.

Blackstone again, right? I mean, their moves are definitely catching everyone’s attention. Exactly. I had the chance to chat with Ken Kaplan, Blackstone’s head of real estate, uh, to get some insights into their strategy. Oh, nice. You know, it’s fascinating how a global player like Blackstone, approaches retail in this, you know, ever changing market.

Yeah. Let’s start with the basics. You know, what is driving Blackstone and other major players to be so bullish on these grocery anchored retail centers? Well, Kaplan was very clear about this. You know, he believes that the grocery anchored retail asset class is highly sought after by institutional investors like Blackstone.

Okay. And we’ve seen this play out, you know, through their recent acquisition of ROIC. Right. He attributes this to several factors. Uh, you know, people frequent grocery stores, regardless of the economic climate. They prefer to spend cash in their neighborhoods. Yeah. Uh, shopping centers are reasonably priced.

Makes sense. And the supply demand dynamics are favorable. So Blackstone sees these centers as, you know, stable investments, even during times of economic uncertainty. Yeah. He went on to say that these centers have been a solid investment for them since 1983, and that the yields during, you know, challenging economic periods, like a pandemic or high inflation.

Right. Make them particularly attractive because of their recession resistant nature. That makes a lot of sense. You know, it highlights that enduring appeal of gross re anchored centers. Right. They provide those essential goods and services, which is a key factor in their resilience. And Kaplan also emphasized the importance of strong relationships in this sector.

Yeah. And he pointed out that many individual owners prefer to hold their assets for extended periods. Right. Uh, making the sector fragmented and resulting in a limited supply of high quality product for those institutional investors. So Blackstone sees this fragmentation as an opportunity. Yes. They can leverage their expertise and network to acquire.

You know, those prime properties that might not be accessible to smaller investors. Precisely, and their track record speaks volumes. You know, they’ve transacted over 4. 3 billion dollars in grocery anchored centers. Wow. And show no signs of slowing down. Right. But with the rise of e commerce and the growing demand for experiences, how is Blackstone adapting?

Well, they’re embracing this concept of, you know, experiential retail. Right. Aiming to create those vibrant and engaging spaces that offer more than just goods. A prime example is Level 99. Yeah. The entertainment center they developed in West Hartford, Connecticut. Right. Kaplan highlighted their strategy, saying that dynamic experiential retail is key to creating thriving communities.

They stay ahead of trends, shaping how we live, work, and play, and bring in tenants who curate those captivating experiences. Okay. From food and beverage to recreational and educational activities. So it’s about crafting those destinations that draw people in, offering them something unique and memorable.

Exactly. Level 99 embodies this perfectly. It’s a sprawling 50, 000 square foot complex offering dining, gaming, immersive experiences. Wow. They even have competitive axe throwing and a speakeasy style restaurant. It’s a far cry from the traditional shopping mall, you know? Right. Blackstone is redefining the retail landscape by catering to a generation that values experiences connection and authenticity.

They’re shifting the focus from simply buying things to creating lasting memories. That raises a crucial question for DFW investors, you know? Yeah. How can they integrate these experiential elements into their own retail spaces? Well, it begins with understanding the needs and desires of That local community.

Yeah. What kind of experiences would resonate with them? Right. What would entice them to spend time in a particular space? It requires thinking outside the box and being willing to experiment. Yeah. Kaplan stressed the importance of focusing on, you know, the unique dynamics of each neighborhood and building spaces that foster a sense of community.

It’s a fascinating and evolving approach to retail. It’ll be interesting to see how these trends shape the DFW landscape in the years to come. Absolutely. Now let’s turn our attention to another trend, making waves. Uh, the rise of mini pharmacies. Mini pharmacies, that’s interesting. Yeah, CVS Health is planning to open 12 mini stores across the U.

S. These will be about half the size of a typical CVS. Okay. Focusing primarily on medication. So it seems like they’re responding to that growing demand for accessible and affordable healthcare options. Right. While also trying to compete with online giants like Amazon who are venturing into that pharmacy market.

These mini pharmacies will offer a curated selection of over the counter medications, first aid products, snacks, cosmetics, and a full service pharmacy. Interesting. The 2024 with some even located inside Target stores. This strategy could be a game changer for the pharmacy industry and could impact retail real estate as well.

Definitely. Now before we wrap up, I want to touch on property taxes. Okay. Specifically, a potential loophole in Texas that’s allowing some developers to secure substantial tax breaks. This sounds intriguing. Tell me more about it. It appears some developers are exploiting a legal provision that lets them convert market rate properties into affordable housing.

Right. In exchange for property tax exemptions. Interesting. State lawmakers have taken notice and are now considering legislation to address this practice. Okay. While these tax breaks aim to encourage affordable housing development, critics argue that they’re being misused by developers seeking to reduce their tax burden.

Without truly providing affordable housing options. It’s a complex issue with significant implications for both the real estate market and the availability of affordable housing in Texas. Absolutely. Its topic, we’ll continue to monitor closely now. Let’s wrap up our deep dive with key takeaways and a thought provoking question for you to consider.

Okay, so we’re back and ready to kind of distill some key takeaways from our deep dive into the DFW retail real estate market. Yeah, let’s recap, you know, what we’ve uncovered today. First and foremost, the DFW retail sector remains strong, despite some of those national economic uncertainties. You know, this strength is particularly evident in the suburban areas experiencing that rapid population growth, right?

DSW’s diverse economy and strong fundamentals make it a very attractive market for those retail investors. Yeah, we saw this firsthand in Collin County, which is projected to be one of the fastest growing counties in the nation in 2025. Yeah. This growth is fueling demand for all types of retail. From grocery anchored centers to those offering those unique experiences.

Right. And speaking of experiential retail, we learned from Blackstone that creating those engaging experiences that resonate with today’s consumers is key. Yeah, Blackstone’s success with gross re anchored centers and innovative developments like Level 99 offers valuable lessons for investors in DFW who are looking to adapt to this changing retail landscape.

For sure. You know, we also discussed how strong job growth driven by companies like Siemens and Ambrose can create that ripple effect that boosts the local economy and increases demand for those retail spaces. And while national trends like inflation and trade tensions require careful monitoring DFW’s diverse economy and strong demographics, position it well to navigate those potential challenges.

Absolutely. A boffice market is also showing signs of recovery with companies like KLOM on orthodontics and care. com expanding their presence in DFW, you know? Yeah. This kind of reaffirms the region’s appeal as a hub for talent. and innovation. Even the car wash industry, which is currently experiencing a slowdown, offers those valuable insights into the importance of conducting that thorough market analysis and due diligence.

So what’s the key takeaway for our listeners today? Well despite those national economic anxieties, the DFW retail market is thriving, especially in those suburban areas, experiencing that rapid population growth. Collin County, north of Dallas, stands out as a particularly attractive area for retail investment with its robust DFFW communities.

And investors should consider those benefits of investing in DFW retail, especially in light of Blackstone’s strategy of focusing on grocery anchored centers and incorporating those experiential elements into their developments. If DFW retail real estate, Eureka Business Group is here to help our team of experts can guide you through the complexities of the market.

And help you identify those promising investments that align with your goals. We’re passionate about DFW retail, and we’re confident that this market has a bright future. So if you’re ready to take the plunge, reach out to Eureka Business Group. We’d love to connect with you and discuss how we can help you achieve your investment goals until next time.

 Welcome to the deep dive. We’re diving into the latest developments in the Dallas Fort Worth commercial real estate market brought to you by Eureka business group. Of course, the DFW retail specialists. We have a really interesting mix today. Some national trends and some hyper local. DFW developments, focusing on retail real estate in our area.

Really going to be zeroing in on what’s most relevant and I think most intriguing for anyone interested in retail real estate. All right. So let’s jump right in. Sounds good. Let’s take a look at some specific news items first, and then we can analyze what they mean. You know, for the retail landscape, both now and in the long term.

All right. Let’s start with some exciting news for downtown Dallas. The Dallas Wings are moving to the Kay Bailey Hutchison Convention Center this year. This year. Yep. That’s a 15 year agreement, actually. Wow. A great sign for the revitalization of downtown. I mean, that’s just a huge vote of confidence for downtown.

That’s really perfect timing, too, because the 2026 FIFA World Cup, right? Yep. is expected to bring a huge influx of visitors. Yeah. And investment. Yeah. To the DFW area. Exactly. It’s putting our region on the map. Yeah. You know, as a global destination. I think it’s going to create a ton of opportunities for new businesses and just a more vibrant consumer market.

Which is great for retail. Fantastic for retail. Yeah. So, Eureka Business Group. Right. We can help you navigate these exciting opportunities. And develop future proof strategies. Absolutely. To capitalize on this growth. That’s our bread and butter. All right. Let’s move on to another positive development.

Okay. For DFW retail. Sally Beauty. Oh! I saw that one. A Fortune 1000 company, by the way, is relocating its headquarters from Denton to Legacy West in Plano. This move really highlights the growing appeal of Plano as a business friendly environment with a highly skilled talent pool. It really does. And you know, Plano’s been attracting a lot of big companies lately.

Like KFC also recently moved its headquarters there. Interesting. So these corporate relocations, they bring A substantial workforce, right? Absolutely. Boosting the local economy. Driving demand. Yeah. For retail services. For sure. It means Plano is a really strong retail market right now, attracting businesses.

Yeah. And consumers. Right. So, Eureka, Business Group, we have, you know, we have the local market knowledge. Yeah. To help investors, you know, find the best locations in Plano. So now let’s shift gears a little bit. Let’s look at some broader Retail sector trends. One interesting development is the continued growth of off price retailers.

Ross, for instance, is planning to open like 90 new stores this year. Yeah, it’s really a reflection of where retail is at, you know, post pandemic. Consumers are looking for value, right? With, I mean, inflation, you know, and the economy. Off price retailers are really well positioned to take advantage of that to meet that demand.

But while some retailers are thriving, others are facing some challenges. We’ve seen reports that international brands like Mango and Uniqlo are struggling to gain traction in the U. S. market. It just goes to show you how important it is to really understand. Those local consumer preferences, you know, and trends, what works in one market doesn’t always work in another.

Yeah. So success in retail really hinges on tailoring your offerings to the specific needs and desires of your target audience. 100%. Which again is where Eureka Business Group comes in. Yeah. You know, we have a deep understanding of the DFW market. Absolutely. Can help retailers succeed in this. ever changing environment.

That’s what we do. All right, now let’s take a look at the office market in DFW. You know, we’re seeing an uptick in office construction in the Dallas Metroplex. Interesting. Which is notable because it’s actually going against the national trend. Office development is declining nationally. Why is that?

What’s going on here? I think part of it is companies are returning to the office. Ah. At least to some degree. Right. And they need updated modern workspaces. I mean, to attract and retain talent. Yeah, makes sense. Yeah, they’re looking for spaces that foster, you know, collaboration, innovation, employee well being.

Right. Exactly. This presents a great opportunity though for investors to secure prime office spaces in a growing market. For sure. For sure. And you know, Eureka Business Group, we can help with these investments, you know, leveraging our expertise in the DFW office market. Now, um, let’s turn our attention to Frisco.

Okay, which is really emerging as kind of a hub for tech startups these days. Yeah, Frisco the Frisco Economic Development Corporation Yeah, they’re actively attracting these startups, right? They’re recognizing their potential for innovation job growth Economic expansion smart move on their part. I mean tech startups, you know, they often attract a younger demographic right with disposable income and You know, that’s always a good thing for the retail sector.

Yeah, absolutely. So this focus on attracting these tech startups, this combined with the talented workforce and the business friendly environment, it makes Frisco. Pretty attractive. Super attractive. Yeah. For, for all kinds of businesses. Yeah. And it’s, it’s creating this positive feedback loop, you know.

Yeah. That benefits everybody. Absolutely. And it’s not just Frisco, right? No. It’s the entire DFW Metroplex. The whole Metroplex. Experiencing this growth in the tech and manufacturing sectors. Yup. And a prime example of that is Siemens. They decided to build a new manufacturing facility. Oh, wow. In Fort Worth.

Yeah. 190 million dollar investment, creating 800 new jobs. I mean, that just strengthens the region’s manufacturing, you know, prowess. Yeah. And we can’t forget about the ripple effect that this has on retail. Oh, for sure. Huge ripple effect. More jobs mean more people. More disposable income. Right. Which, ultimately It all, it all trickles down.

And DFW is really strategically positioned to capitalize on this growth trajectory. Speaking of understanding those local consumer preferences. We’ve seen some interesting national retail trends. Yeah. That highlight this importance, you know, of knowing your market. It all comes back to that. The retail landscape’s always evolving.

Yeah. And, and what works in one area, you know. It might not work in another. Yeah. For instance, we talked about the success of off price retailers, like Ross, right? Yeah. They’re expanding aggressively. On the other hand, some international brands, they’re struggling to gain traction here in the U. S. They are.

Yeah, CNBC reported that, um, Mango and Uniqlo, both, you know, well known international retailers, but they’ve really found the U. S. market to be A bit more challenging than they anticipated. Than they anticipated, yeah. So this underscores the need to adapt. For sure. To those local tastes, to those buying habits.

Yeah. And it really reinforces the need to partner with experts, you know. Right, yeah. People who understand the nuances of the local market. Yeah. I mean, Eureka Business Group, you know, we have deep roots here in DFW. We can help investors identify. You know, the most promising locations, the trends that align with consumer demand.

So it’s not just about square footage or, you know, right. It’s about understanding the dynamics of the DFW retail scene while we’re on the topic of dynamic markets. We can’t ignore. What’s been happening with office spaces. Oh yeah, the office sector has seen some, some big changes. It’s important to, to stay informed, you know, about the trends.

The Society of Industrial and Office Realtors, S I O R, they offer some great insight. They do, they do, yeah, and they highlight a really fascinating trend. Okay. Which is that Companies are moving away from those traditional office layouts and they’re embracing, you know, more flexible and collaborative work environment.

All that adapting. Adapting, yeah. The changing needs of the workforce. A hundred percent. So we’re seeing a shift towards spaces that promote employee well being. Creativity. Sense of community. Exactly. You know, modern office spaces are incorporating things like open floor plans, communal areas, you know, natural light, all these things that enhance the employee experience and hopefully, you know, foster productivity.

So this has significant implications for investors who are looking at office spaces in DFW. Absolutely. It’s, it’s no longer just about, you know, securing a space. It’s about investing in an environment. That aligns with right what today’s workforce wants, right? That makes total sense. So as the DFW area continues to grow, right?

The need for these updated, attractive office cases is only going to increase. It’s only going to increase. Yeah. And that creates opportunities for investors. You know, the ones who are willing to adapt. Embrace the evolving demands of the modern workplace. Well, that’s a perfect segue to another area that’s attracting a lot of attention.

Frisco’s tech scene. Frisco’s doing a great job with that. They’re really cultivating a thriving tech ecosystem. And it’s, it’s working. Yeah. From what I’ve seen in local profile. Yeah. The Frisco Economic Development Corporation is doing a fantastic job. Mm hmm of attracting these startups and it’s generating a lot of buzz.

Yeah, it’s smart tech startups You know, they bring they bring innovation. They bring job growth. They bring a younger demographic, right and that supports retail Absolutely, which drives economic expansion, and Frisco has a lot to offer, including a talented workforce and a business friendly environment.

All those factors are like magnets, you know, for businesses of all sizes. And it’s creating that positive feedback loop, you know, we talked about earlier, benefits the entire community. Yeah, and it’s not just Frisco. Again, it’s the entire DFW Metroplex experiencing this growth. Mm. In, you know, in tech, in manufacturing.

Right. I mean, Siemens deciding to build that new manufacturing facility in Fort Worth. Yeah. That’s a perfect example. 190 million investment, creating 800 new jobs. That’s, you know, that’s huge for the region. Strengthening that. Manufacturing prowess. Yeah. And again, we can’t forget the ripple effect. Huge ripple effect.

This has on retail. For sure. More jobs. More people with, you know, disposable income. Yeah. Ultimately boosts the retail sector. It’s all interconnected. Yeah. And DFW is well positioned to take advantage of this. All this news is making me even more excited. Yeah. About the future of DFW real estate. I mean, it’s a vibrant, dynamic market.

So much potential. It’s a great time to be involved in DFW real estate and understanding these trends, you know, that we’ve talked about today. Yeah. Can help you make. Smarter decisions. Absolutely. Now, we’ve covered a lot of ground today, from, you know, those exciting developments in downtown Dallas, to the rise of Frisco as a tech hub, you know, we’ve seen how national retail trends are playing out locally, how the growth in tech and manufacturing is really fueling the DFW economy.

And we can’t forget the World Cup, you know. Oh yeah, absolutely. The 2026. The 2026 World Cup coming up. Yeah, that’s going to, that’s going to boost DFW’s profile. Huge. Even more. It’s an exciting time. It is. To be invested. It is. In the Dallas Fort Worth real estate market. Absolutely. It is an exciting time.

As we wrap up our deep dive today, let’s just take a minute to summarize the key takeaways. So we’ve seen some really positive growth across different sectors in the DFW area. We’ve seen a particular strength in retail, office. Yeah, we also highlighted how important it is to really understand the DFW market, you know, knowing what consumers want, what they’re looking for, where those businesses are moving, and recognizing how, you know, those bigger trends create opportunities.

That’s key for success. And, you know, partnering with those experts like Eureka Business Group. Right. That can make navigating this dynamic market a lot easier. Much easier. Yeah. The DFW market, it has a lot of potential. Yeah. Yeah. It really does. And staying informed, you know, that’s what’s going to allow investors and businesses to capitalize on that growth and, and reach their goals.

Absolutely. So to our listeners, if you’re ready to explore those opportunities in DFW, you know, connect with Eureka Business Group. Our team can provide that guidance, you know, on the local market, help you discover the potential of retail real estate right here in DFW. Thank you for joining us. For this deep dive into DFW commercial real estate.

We look forward to bringing you more insights and analysis in future episodes. Until then happy investing.

 Welcome back everyone for today’s deep dive curated by Eureka Business Group. Uh, we’re going to be focusing on the latest DFW commercial real estate news. That’s right. We’ve been sifting through tons of reports and articles to bring you the most impactful trends and developments. Exactly. So if you’re interested in staying ahead of the curve in this market, this is the place to be.

Absolutely. Let’s jump right in and see what’s making waves. Okay. So first up, let’s talk about the data center boom that’s happening right here in Texas. Yeah, this is a big one. Data center space in Austin is expected to grow like a crazy amount. 80 percent in 2025 alone. Wow, that’s massive. And guess what?

Dallas Fort Worth already has the most data center square footage in the entire state. It’s quickly becoming a major hub for this industry, and for good reason too. So tell me, what are some of the key players driving this growth? Well, you’ve got companies like Skybox, Sabi Prologis, and Digital Bridge.

They’re all developing huge, multi million square foot projects. And where are these projects mainly concentrated? Mostly in areas like Round Rock, Pflugerville, and Hutto. Interesting. And what’s the big draw for these companies to come to this area? Well, a couple things. The availability of land that’s suitable for these massive data centers is a huge plus.

Makes sense. And then there are the competitive utility costs, which is a big factor when you think about the amount of power these facilities need. Right, because these data centers are running 24 7. Exactly. And they’re being built with 100 percent occupancy in mind too. Oh, wow. So unlike a traditional warehouse where you might have some vacancy.

Yeah, this shows just how strong the demand is in this sector. It’s pretty incredible to think about the scale of these projects, too. Like, you mentioned one project in Hutto alone could power 200, 000 homes. It really puts it into perspective, doesn’t it? It does. And with institutions like UT partnering with these developers, it seems like this trend is here to stay.

Oh, absolutely. This is not a short term blip on the radar. So for savvy investors, this sounds like a major opportunity. I’d say so. It’s definitely a sector to keep an eye on. Now let’s switch gears a bit and talk about retail. Okay, so is the traditional mall dead? That’s the big question, isn’t it? I don’t think it’s dead, but it’s definitely evolving.

Yeah, I agree. Simon Property Group, the biggest mall owner in the U. S., is actually taking a really interesting approach to revitalizing their malls. So what are they doing differently? Well, instead of just relying on traditional retail stores, they’re bringing in a whole new kind of tenant. Like who? Well, for example, they’re attracting health care facilities, hotels and even apartments to create these mixed use spaces.

So they’re basically transforming these malls into more like community hubs. Exactly. And they’re seeing some real. success with this strategy. For instance, Stony Brook Medicine just opened a huge 170, 000 square foot location in one of Simon’s malls in New York. Wow, that’s impressive. So they’re not just talking the talk, they’re actually walking the walk.

Right. And the best part is they’re not just doing this in other states. They’re actually implementing similar plans right here in DFW. Oh, really? That’s great to hear. Yeah, like they’re adding office space to the shops at Clearfork in Fort Worth. Okay, so they’re really diversifying their offerings.

Exactly. And it’s not just Simon Property Group doing this either. We’re seeing this trend of mixed use development popping up all over DFW. It makes sense. I mean, think about it. People want convenience and a sense of community. They want to be able to live, work, and play all in one place. Absolutely. And developers are responding to that demand.

But hold on, not everyone’s taking the same approach, right? You’re right. Walmart, for example, is doing things a bit differently. Yeah, how so? Well, they’re actually buying up struggling malls and completely redeveloping them. So instead of just trying to fill the existing space, they’re starting from scratch.

Pretty much. They recently bought Monroeville Mall near Pittsburgh, which had been struggling for years, and they plan to completely revitalize the whole area. That’s a bold move. It shows just how much confidence they have in the potential of these properties. Yeah, and it’ll be interesting to see how this approach plays out compared to the mixed use strategy.

Definitely. It’s like two different philosophies of how to adapt to the changing retail landscape. Exactly. And ultimately, it’ll be the consumer who decides which approach wins out. Now let’s zoom in on some other notable retail news, specifically in the DFW area. Okay, so first up, McDonald’s, they’re actually doubling down on their beverage focused concept called Cosmix.

Cosmix? I haven’t heard of that. Yeah, it’s a relatively new concept for them. They’re opening a new location in Allen. Interesting. So they’re focusing on the specialized format instead of just opening more traditional McDonald’s. It seems like it, they’ve actually closed a few underperforming McDonald’s stores in Dallas.

So it seems like they’re shifting their strategy a bit. It makes sense to adapt to the market and what consumers want. Absolutely. And speaking of adapting, we’re seeing some shifts in consumer spending that are impacting other retailers. Oh yeah, like what? Well, fabric and craft retailer Joanne is closing over half of its stores nationwide.

Wow, that’s a big deal. That says a lot about how people are spending their money these days. Yeah, it’s a sign of the times for sure. And another interesting development is happening in the restaurant industry. What’s going on there? Well, TGI Fridays is selling most of its remaining corporate owned locations to franchisees.

Including some in Dallas. Yes, including some in Dallas. So they’re moving away from the corporate ownership model. It seems that way. It’s actually a trend we’re seeing across the restaurant industry. Companies are shifting towards franchise models to expand and reduce their operational burden. It’s interesting to see how these different sectors are adapting to the changing market conditions.

Yeah, there’s definitely a lot of movement and innovation happening. Now let’s talk about what all of this means for investors. Okay, so one statistic that really jumps out at us is the vacancy rate for small industrial spaces. You mean spaces under 100, 000 square feet. Exactly. It’s incredibly low right now, sitting at just 3.

9 percent as of Q4 2024. Wow, that’s tight. So if you’re looking for a small warehouse in DFW, you’re going to have to be pretty competitive. Absolutely. There’s a lot of demand and not a lot of supply, which creates both challenges and opportunities. Right. It’s a seller’s market for sure. Yeah. But this low vacancy rate also indicates that this sector is performing really well.

Exactly. It’s a sign of a healthy and growing market. And of course, we can’t talk about investing without mentioning tax policy. Right, because tax policy can have a huge impact on investment strategies. Exactly. There are some potential changes coming down the pipeline that investors need to be aware of, like changes to the corporate tax rate and possible revisions to bonus depreciation and interest deductions.

It’s a lot to keep track of, for sure. Which is why it’s so important to have a trusted advisor who understands the nuances of the market and can guide you through these changes. Absolutely. Someone who can help you make informed decisions and maximize your returns. Now let’s step back and look at the bigger picture.

What’s driving all of this growth and activity in DFW? Well, it all comes down to the fact that DFW is a magnet for both residents and businesses. We’re seeing a lot of people moving here from other states. Right. In the past three years alone, DFW has gained almost 400, 000 new residents. That’s incredible.

And that population growth is fueling demand across all sectors of the real estate market. Exactly. From industrial space to housing to retail, it’s all interconnected. And DFW also has a lot to offer businesses. A diverse economy, a strong job market, and a pro business environment. It’s a recipe for success.

And we’re seeing proof of that with companies like Yum Brands relocating corporate employees to Plano. Yeah, they moved 190 employees from Louisville to Plano, which shows just how attractive DFW is to major corporations. It’s a testament to the strength of the region and its potential for growth.

Absolutely. DFW is a market that’s worth paying attention to. So whether you’re a seasoned investor or just starting out, there’s definitely something here for everyone. And the key is to stay informed and be prepared to adapt to the ever changing market conditions. That’s where a company like Eureka Business Group can really help.

Exactly. We have the expertise and the resources to guide you through the complexities of the DFW market and help you achieve your investment goals. But before we continue with retail trends in DFW, let’s take a quick break. Welcome back, everybody. Let’s dive a little deeper into this DFW retail market.

Yeah, it’s definitely an area we’re seeing a lot of interesting activity. Right, and it’s actually our specialty here at Eureka Business Group. Yeah, so we’re really excited to share some of our insights. Okay, so we were just talking about Simon Property Group and their innovative approach to revitalizing their malls, right?

They’re really shaking things up. They’re not just focused on those traditional retail tenants anymore. They’re bringing in a whole mix of offerings like health care facilities, entertainment venues, even residential spaces. Yeah, it’s all about creating these dynamic. Mixed use environments. Exactly right.

It’s about catering to a wider range of needs and preferences, so instead of just going to the mall to shop, you might also go there to see a doctor or catch a movie, or even live there. Right? It’s about creating a destination that offers a more well-rounded experience. And it makes sense when you think about the challenges faced by traditional department stores.

Yeah. As those anchor tenants, downsize or close malls need to find creative ways to fill those spaces. And Simon Property Group is being proactive about it. They’re not just waiting for things to happen, they’re actively seeking out alternative tenants and uses. And this shift towards mixed use development, it’s not just happening in malls either.

We’re seeing it all over DFW in retail properties of all shapes and sizes. It’s becoming a key trend in the market. It’s a reflection of how consumers are changing and how retail is evolving. Absolutely. Now, another interesting development in the retail sector is the rise of these digitally native brands.

You mean brands that started online and are now opening physical stores? Exactly. Like Warby Parker, Glossier, even Amazon. They’re all establishing a physical presence to complement their online operations. It’s an interesting strategy because it allows them to connect with customers in a more tangible way.

Right. It’s about creating a seamless omni channel experience. And for investors, this presents an opportunity because these digitally native brands are often looking for prime locations in high traffic areas. They want their physical stores to reflect the quality and aesthetic of their online brand.

Which can drive up property values and attract other desirable tenants. It’s a win win for both the brand and the property owner. Okay, so we’ve talked about retail. Let’s shift gears a bit and talk about the office market. Okay, so the office sector has definitely impacted by the rise of remote work.

Yeah, a lot of people are working from home these days. But that doesn’t mean the office is dead, right? It’s just evolving. Exactly. We’re seeing a flight to quality in the office market. Companies are looking for spaces that offer more than just a place to work. They want amenities, Collaborative spaces, a focus on employee well being.

Think fitness centers, rooftop gardens, on site cafes. It’s about creating an experience that draws employees back to the office. And this focus on quality. It’s creating opportunities for investors who are willing to upgrade their properties and cater to the evolving needs of modern businesses.

Absolutely. Now let’s talk about the industrial market, which is a sector that continues to thrive in DFW. Yeah, we’ve seen incredible growth in this sector. It’s being fueled by a number of factors like e commerce expansion, the need for efficient logistics and distribution networks and DFW’s strategic location.

Right. With its central location and excellent transportation infrastructure, DFW is a major hub for warehousing and distribution. And as e commerce continues to grow, the demand for warehouse space is only going to increase. Which means there’s a lot of potential for investors in this sector. But of course there are challenges too, like the low vacancy rate for industrial spaces.

Especially for those smaller spaces under 100, 000 square feet. Right. The competition for those spaces can be fierce. Which is why it’s so important to work with a knowledgeable broker. Who can help you navigate the market and find the right opportunities. Absolutely. Now let’s touch on a topic that’s always on the minds of investors, tax policy.

Ah, yes. The dreaded tax man. Well, it’s something we all have to deal with, and tax policy can have a big impact on real estate investment strategies. There are some potential changes coming up that investors need to be aware of. Like changes to the corporate tax rate and possible revisions. to bonus depreciation and interest deductions.

You could be a lot to keep track of. But it’s important to stay informed so you can make the best decisions for your investments. Now let’s shift back to the bigger picture for a moment. What makes DFW such an attractive market overall? Well, it’s more than just the real estate market itself. It’s the quality of life, the diverse economy, the pro business environment.

It’s a place where people want to live and work. And that’s a key factor to consider when evaluating any investment opportunity. Right. Because a strong and growing economy is going to support a healthy real estate market. And we’ve seen this in action with companies like Yum Brands. Yeah, they moved their corporate offices from Louisville to Plano, which shows just how much confidence they have in the region.

It’s a testament to the strength and potential of the DFW market. So as we’ve seen, there’s a lot happening in the DFW commercial real estate market. It’s a dynamic and exciting time to be an investor. So as we wrap up our deep dive into the DFW commercial real estate market, you know, it’s important to emphasize that.

Yeah, what’s that? Well, it’s the importance of seeking expert guidance when navigating this landscape. Yeah, it’s definitely a complex market with a lot of moving parts. Especially in a market as dynamic and as diverse as DFW. Having a trusted partner can make all the difference. Right, and at Eureka Business Group, that’s what we pride ourselves on, being that trusted partner for our clients.

Yeah, we specialize in the retail sector. And have a deep understanding of all the trends and challenges and opportunities. We’re constantly analyzing data and monitoring developments to give our clients the most relevant and insightful information. So whether you’re looking to acquire a property, or reposition an existing asset, or just stay informed about the market.

We’re here to guide you every step of the way. Because at the end of the day, knowledge is power. And we’re committed to empowering our clients with the knowledge they need to make smart decisions. So as you consider your next move in the DFW commercial real estate market, remember that Eureka Business Group is here to support you.

We’re passionate about helping our clients succeed. And we’re confident that our expertise can help you reach your real estate goals. Thanks for joining us on this deep dive into the DFW commercial real estate market. We hope you found it informative and maybe even a little bit entertaining. And if you have any questions about the retail market in DFW, or anything else real estate related, please don’t hesitate to reach out to us at Eureka Business Group.

We’re always happy to help. Until next time, happy investing everyone.

 Welcome to the deep dive where we take a look at what’s happening in DFW, commercial real estate and beyond. It’s Valentine’s day, but today we’re ditching the chocolates and roses and talking about something you really care about making smart decisions in the DFW commercial real estate market. We’ve got some big things to talk about today.

A 750 million project that’s changing Plano DFW beating out Phoenix for the number two spot in the nation for bill to rent projects. Wow. And We’re going to see if b malls are really dead or not. Here to help us understand all of this is our expert. Glad to be here. Let’s jump in. Okay, let’s get started with the huge Haggard Farms development.

Okay. This 750 million project in Plano is at Spring Creek Parkway and Parkwood Boulevard. You know where that is. Yeah, I know it. Prime location. And it’s a great example of how popular these mixed use developments are right now. Yeah, they’re 200, 000 square feet of retail space. Huge. 700 multifamily residences.

A boutique hotel. offices and even more retail. Plus they’re putting in 10 acres of green space. Sounds nice. The retail should be done in about 14 months. Okay. And the residence is in about 20. The developer, Stillwater Capital, is starting with commercial amenities this summer, early summer. Oh, wow. So that means that they’re looking at retail as like the main driver of this whole thing.

Yeah, that’s what it seems. So they’re probably gonna get All sorts of different tenants in there, which is going to bring up the value. Makes sense. And you know, this all ties in with what we’ve been seeing lately with multifamily housing doing better than other types of real estate. Absolutely.

Investors are really interested in multifamily right now. Rents are strong. There’s not a lot of new supply. It’s a good investment. Makes sense. Plus, now that interest rates are up, it’s harder to buy a house. Yeah, it’s tough. So, people are renting more, which is good news for people who own rentals. Okay, let’s switch gears and talk about something else that’s hot right now.

Build to rent, or BTR for short. Okay. Get this, DFW is now number two in the country for BTR projects, and we’re even ahead of Phoenix. Really? I did not know that. Almost 8, 500 projects under construction in DFW. Wow. And for all of Texas, there are over 22, 000 BTR projects going on. That’s like 56 percent more than Arizona.

Wow. And a lot of this is happening because mortgage rates are so high, it’s hard to buy a house, especially for first time buyers. Right. People also seem to like the flexibility of renting, especially after the pandemic. Yeah. In DFW, we see a lot of BTR in Dallas, Fort Worth, McKinney, Princeton. Makes sense.

And get this. A third of the BTR projects in DFW are all part of one development, Living Fully Orchard Farms. Wow. One development. Yeah. So this is something that investors are really thinking about. Yeah. Because with all this new supply, will rents keep going up? Some people think they will, but others think they might slow down because of things like Construction slowing down.

Yeah. Materials costing more. Yeah, it’s hard to say for sure. You’ve got to watch things closely. It’s a really interesting time. It is. Okay, let’s move on to retail. Specifically those b malls. You know, the ones that are usually anchored by a department store. They’re not doing so well these days. Yeah, not so hot.

So, the big question is, are they done for or can they come back? Hmm. Good question. Okay. So let’s talk about this mall grading system for a sec. Okay. You’ve got A malls, which are like the top tier, right? Right. The best tenants doing really well. Then you’ve got B malls. Okay. Those are kind of in the middle.

And then C malls. Okay. Those are struggling. And there’s this company called Green Street. They’re like the experts in commercial real estate. Okay. They’re saying that for most malls that are graded B or lower, The future’s not looking good. Oh, wow. Yeah. They think a lot of them are going to be changed into something else over the next ten years.

Like, maybe apartments or offices. Interesting. So, why are these b malls having such a hard time? Well, you know, department stores are closing left and right. Yeah? And when they leave, it’s like a domino effect. Other stores close. Less people come to the mall. It’s a mess. Yeah, it’s tough. And then you’ve got online shopping.

That’s not helping either. Definitely not. People are buying more and more stuff online. So it’s a tough spot for BMalls. It is. But there might be some opportunities there for investors who know what they’re doing. Yeah, potentially. Like you said, maybe converting them into something else. Right, right. Or maybe finding those emerging brands, the ones that are growing.

They might be looking for space. Yeah, could be. A malls are full, so maybe they’ll look at B malls. Maybe. And there are some signs of this happening in DFW, Simon Property Group, they own a lot of malls. Yeah, I know them. They’re investing in b malls here. They’re trying to get those up and coming brands.

That’s smart. Yeah, and they’re putting money into the malls themselves, trying to improve them, make them nicer for shoppers. Okay. So that’s a sign that maybe there’s hope for some of these b malls. Yeah, maybe so. Okay, let’s zoom out and look at the bigger picture now. Construction costs went way up in January.

They did? Yeah. And that’s because of The new Trump tariff on imports. Contractors are buying everything they can now before prices go up even more. That’s a big deal. So what’s that going to mean for consumers? You think prices are going to go up? Some economists think so. Okay. And then you have Jerome Powell, the Federal Reserve Chairman.

He said they don’t need to lower interest rates anytime soon. Oh, wow. Which means that borrowing money is going to stay expensive at least for a while. Yeah. And that affects both development and investment. It makes it more expensive to build new projects. Right. And it can make investors less likely to put money into new projects.

Yeah, definitely. So, understanding all of this is really important. For anyone who’s involved in DFW real estate, it doesn’t matter if you’re a developer, an investor, or a tenant, these things are going to affect you. You got that right. It’s a lot to keep track of. Yeah. But that’s why we’re here, right?

Trying to make sense of it all. Exactly. Yeah, exactly. It’s a wild ride out there. Speaking of things changing, let’s talk about how they’re designing multi family properties these days. It seems like they’re really focusing on the people who are going to live there. Yeah, it seems like a much more, uh, User centric approach.

Totally. Architects and designers are like, actually listening to what people want. So what does that mean? Like, what are they actually doing? Okay, so you see bigger community spaces with like, awesome gyms and areas just for like, wellness stuff. Interesting. And then outdoors, you’ll see more rooftop patios and stuff and courtyards with landscaping and all that.

And pet stuff is huge now, dog parks, places to wash your dog. I see. It’s all about what people want these days. They want community, they want to feel good, and that’s what these places are trying to do. Makes sense. So it’s not just about those shared spaces, right? Like, what about the individual apartments themselves?

Yeah, so there’s this big push for personalization. Like, you can actually customize your apartment. Oh, wow. Yeah. Choose your paint colors, the fixtures, maybe even the flooring. So, it feels more like your own place. Interesting. So, it’s all about that unique, personalized living experience. What about, like, the design, the look of these places?

What are the trends? Okay. So, with colors, it’s bold but warm. Like, you’ll see mustard yellow, terracotta, blues. Oh, that’s interesting. So it’s not that minimalist thing anymore. Minimalism is still there, but people want a little more warmth, so you’ll see soft colors and natural stuff like wood and metal, and then like textures, you know, with rattan and leather.

Okay. And of course, sustainability is still huge, right? Oh yeah, absolutely. Lots of recycled and eco friendly materials like countertops made from recycled glass or furniture from reclaimed wood. And the fabrics too are more eco conscious. It’s good for the environment and people like it. Speaking of changes, let’s talk about working from home and how that’s impacting commercial real estate.

Yeah, that’s a big one. There’s the study from NYU in Columbia. They looked into this whole thing and basically working from home or even just part time, it’s causing office space demand to go down. Really? That makes sense, but I wonder how much of a difference it’s making. Oh, it’s a big difference. Look at New York, for example.

Office values there went way down during the pandemic because companies just needed less space. Wow. Yeah, same thing in other cities, San Francisco, Miami, Houston. It’s like a whole new way of thinking about offices. So what does this mean for the future of office buildings? Well, this study suggests that office owners, they gotta adapt.

Like, maybe convert some of that empty space into apartments. Two birds, one stone, right? You get more housing and deal with the empty offices. That’s clever. Anything else they can do? Yeah, they gotta be more flexible with leases. Okay. Offer more amenities, make the buildings more sustainable, that kind of thing.

It’s a tough time for offices, but there are ways to make them work. Yeah. Okay, let’s switch gears again. Data centers. They’re booming right now, but that’s causing its own set of issues. Right. All those computers, they use a ton of electricity, putting a strain on the power grid. And, interestingly, more and more data centers are turning to natural gas for power.

Oh, really? Why natural gas? Well, natural gas plants are reliable. Okay. They can be built pretty quickly, and they’re better for the environment than other fossil fuels. Okay, so it’s about having enough power, but also trying to be a little more eco friendly. Yeah, exactly. Are there companies doing this right now?

Oh yeah, Vantage Data Centers, they’ve teamed up with an energy company, VoltaGrid. Okay. And they’re putting in like a gigawatt of natural gas power at their data centers. All across North America. Northern Virginia, Phoenix, Montreal, Quebec City, you name it. Wow. And there’s another company, EdgeConnex, they’re building a natural gas plant near Columbus, Ohio, just to power their data center there.

It’s pretty amazing to see how they’re solving this energy problem while trying to do it in a responsible way. Yeah. Okay, let’s bring it back to DFW. You know, we were talking about Build to Rent earlier and how DFW is number two in the country for those projects. Right, it’s huge here. So, why is that? Is it just because they’re popular everywhere, or is there something specific about DFW?

It’s a few things. First, it’s harder to buy a house now. Right, those high mortgage rates. Exactly. And then, people want more flexibility. They don’t want to be tied down. Yeah, especially younger people. Right. And then, DFW has a ton of jobs. People are moving here and they need places to live. Makes sense.

Where are we seeing the most build to rent projects? Oh, Dallas, Fort Worth, McKinney, Princeton, those areas. Okay. And remember that crazy stat, a third of the BTR projects in DFW are all in one development, living fully orchard farms. Yeah, that’s wild. So what makes these build to rent places so popular?

They’re kind of like apartments, right? They have pools, gyms, all that. But then they also have backyards. Oak. And garages and all the smart home stuff. It’s like the best of both worlds. Apartment living with the space of a house. Yeah, I can see why people like them. Okay, let’s move on to something that could be a real game changer for retail.

Okay, what’s that? Drone delivery. Oh yeah! Walmart is going to start delivering stuff by drone. No way! Really? Where? In East McKinney. They’ve got the zoning approval and everything. Wow! So they’ve got this whole system. A drone carries the package to like A drop off point. Right. And then this little robot, a delivery droid, takes over from there and brings it to your door.

Pretty cool. So what are they going to be delivering? At first, it’s going to be like the things you need right away. Groceries, medicine, stuff like that. Makes sense. This could totally change how we shop. I mean, imagine getting your stuff delivered in minutes. Crazy. Are other companies already doing drone delivery here?

Yeah, Zipline. They deliver medical supplies. They’ve been doing it in DFW for a while now. Oh, yeah. I’ve heard of them. It’s interesting to see how drone delivery is going from, like A cool idea to something real and Walmart getting involved, that’s huge. Okay. Let’s shift gears again. Let’s talk about the northern part of Collin County.

That area is really growing. Yeah, it’s booming up there. Like, Anna, Texas. They’re building this huge new community there, Liberty Hills. Oh yeah, I’ve heard of that. What’s driving all this growth up there? Well, Anna’s population is supposed to double by 2030. Wow, that’s a lot of people. So they need more houses, more businesses, everything.

And that’s where these big developments come in, like Liberty Hills. So what’s so special about Liberty Hills? What are they building there? It’s over a thousand acres, right along Highway 75. They’re going to have all sorts of houses, apartments, amenities, and retail space. It’s going to be its own little town, basically.

Wow, that’s ambitious. Yeah, and it’s not the only big project happening in Ananda. There’s also Shirley Farms. Shirley Farms. It’s a 1. 5 billion project. They’re building 3, 000 houses. Lots of green space and even a working farm a farm. Yeah, a real farm. That’s really cool It’s amazing how these places that used to be like out in the country are turning into cities.

It’s wild. Mm hmm. Speaking of wild What about the economy interest rates are up inflation all that stuff our investors worried, of course, they’re paying attention Yeah, but the market here, especially in DFW. It’s holding up pretty well Why is that? Well, the economy here is strong. Yeah. Lots of jobs.

People are still moving here. So there’s still demand for real estate. Okay. So it’s not all doom and gloom. No. Not at all. But. Investors are being smart. They’re focusing on things that are doing well, like apartments and industrial properties. They’re not just jumping into anything, they’re doing their homework.

So what would you tell someone who’s thinking about investing in DFW right now? Do your research. Okay. Know the market, understand the risks, and that’s where a company like Eureka Business Group can really help. Right, they’re the experts. Exactly, they can help you make smart decisions. Okay, let’s talk about something near and dear to Eureka Business Group.

You know, we talked about e commerce and how retail is changing, but there’s something else happening. Something big. Oh yeah, the metaverse. Yeah. It’s not just a buzzword anymore. It’s real. And it’s starting to change how we shop. I still don’t really get it. What is the metaverse exactly? It’s like a bunch of virtual worlds connected together.

You can hang out with people, go to events, shop, play games. All virtually. So how does that affect shopping? Well, stores are opening up in the metaverse. Really? Yeah, virtual stores and showrooms. You can walk around, check out the products in 3D. You can even try clothes on, see how furniture looks in your virtual house.

Sounds kind of like a video game. It is kind of like that, but it’s way more immersive than just shopping online. So are stores actually doing this? Yeah, Nike has a whole world on Roblox. It’s called Nikeland. Okay. You can play games, hear out, and buy Nike stuff. Gucci is selling Virtual handbags and shoes that you can only get in the Metaverse.

It’s pretty wild. So why is this good for businesses? Well, they can reach new customers, especially younger people who are all about the Metaverse. Okay. It’s also a cool way to build your brand, create experiences you couldn’t do in real life. Makes sense. And what about shoppers? What’s in it for them?

Well, it’s fun. It’s a totally new way to shop. You can check out products in 3D, hang out with brands, go to events, all virtually. So it’s a win win. It could be. But it’s still early days, you know. There are some things to figure out, like how to make it accessible to everyone, the technology, privacy stuff.

Right. But things are moving fast. It’s definitely something to keep an eye on. Definitely. Okay, let’s talk about another trend that’s blurring the lines between online and offline. Omni channel retail. Right. Yeah, it’s like everything is connected. Exactly. It’s about making the whole shopping experience seamless.

It doesn’t matter if you’re in the store, on their website, on their app. It should all be connected. Okay, so can you give me an example? Sure. Let’s say you’re on a store’s website. Okay. And you put some stuff in your cart. Later that day, you go to their store to actually see the stuff. With Omnichannel, you can just open your cart on your phone right there in the store.

I see. Try the stuff on, buy it right there, however you want to pay, credit card, phone, whatever. It’s all connected. That makes a lot of sense. So it’s all about the customer. Yeah, it’s about giving them what they want, when they want it. Okay, so, is this good for stores? Oh yeah, it can mean more sales, happier customers, and they get more information about you, so they can give you better recommendations and stuff.

That’s pretty cool. What about for shoppers? What are the benefits? It’s convenient, it’s flexible, and it’s more personalized. You get what you want, how you want it. Makes sense. Are there stores doing this well right now? Sephora is a good example. They’ve really nailed this omni channel thing. Oh, okay. How so?

They have a great app. Right. You can browse products, book appointments, even try on makeup virtually. Ah. And their loyalty program, it works online and in store. They’ve even connected their inventory so you can order online and pick up in store or the other way around. That’s smart. So they’ve really thought this through.

Yeah, and it’s working for them. It shows how powerful this omni channel thing can be. So for investors looking at retail, what should they keep in mind? Things are always changing in retail. Right. You gotta pay attention to the trends, like this metaverse thing, omni channel, and how the online and offline worlds are merging.

Location is still key. The mix of stores in a property and the overall experience it offers, that’s all important. Okay, good advice. Let’s talk about something that’s really changing the whole DFW landscape, the airport. Oh yeah, DFW Airport is getting a major upgrade. It’s a huge project. What’s going on there?

They’re adding a whole new terminal, Terminal F. Wow. It’s gonna cost three billion dollars, have 24 new gates, and it’ll be connected to the other terminals by that SkyLink train. That’s a lot of work. Why are they doing all this? Well, DFW is one of the busiest airports in the world. Right. They need more space for all the passengers and flights.

This will also help them compete with other airports and bring in new airlines. It’ll really solidify DFW’s place as a global airport. So what does this mean for DFW, for the people who live and work here? Jobs. Lots of jobs. Okay. It’ll boost the economy, bring in new businesses. Right. And it’ll make it easier for people to get in and out of the region.

It’s a big deal for DFW. Okay, let’s talk about another big issue for investors. Offices, right. They’ve been having a tough time. Yeah, but it seems like things might be turning around. Yeah, maybe. Companies are realizing that working in person is still important. Yeah, for collaboration, culture, all that.

Exactly. So, people are coming back to the office, at least some of the time, but it’s not the same as before the pandemic. Right. Offices are changing, they’re more about collaboration, they’re more flexible, and they have better amenities. So it’s not just rows of desks anymore. Nope. What kind of offices are doing well?

The Class A buildings? It’s the really nice ones in good locations. Those are the ones that companies want. They have all the cool stuff and a good address which helps them attract and keep good employees. Any examples of that here in DFW? The Star in Frisco is a good example. It’s a mixed use development and it’s got the Dallas Cowboys.

Headquarters there, plus other offices and a whole entertainment district. It’s a cool place. It shows how offices can work when they’re part of something bigger, where people can live, work, and play. So for investors looking at office space, what’s the advice? Be picky. Location, amenities, who’s already there, that’s all important.

And think about the future. Look for places that can adapt to how people work now. Okay, good advice. Now let’s talk about something that’s essential for any Growing region infrastructure, right? You got to have good infrastructure if you want to thrive. So what’s happening in TFW? Well, I already talked about the airport, but there’s more TxDOT the Texas Department of Transportation is spending billions to improve the roads and highways.

Okay, less traffic better flow safer roads It’s all good What about public transportation? DART, the light rail system, it’s getting bigger, connecting more places, giving people options besides driving. Makes sense. So people can get to work, go out, all that. Exactly. All this infrastructure, it’s good for the economy, and it makes DFW a better place to live.

It’s definitely an investment in the future. Speaking of the future, we’re seeing a lot of companies moving their headquarters to Texas. Oh yeah, it’s like a corporate migration. And DFW is a big winner. What’s the draw? A few things. Texas is good for business. Okay. Lower costs, great workforce. Yeah. And no state income tax, that’s a big one.

Definitely. Yeah. Any examples of companies making the move? Oh, yeah. Caterpillar, the construction equipment company, they moved to Irving from Illinois. Okay. And Charles Schwab, the financial giant, they moved from San Francisco to Westlake near Fort Worth. Wow, that’s a big move. It is. It just shows how attractive Texas and DFW are right now.

It’s exciting to see all this growth. But all these new people and companies need places to live. Exactly. There’s a housing shortage. Yeah. And developers are trying to keep up. So where are we seeing the most construction? Frisco, McKinney, prosper. They’re booming. Yeah. Those are hot areas. Good schools.

Nice communities. Close to jobs. It’s a good package. And what about the cities themselves? Dallas and Fort Worth. Oh, they’re doing well too. Lots of new apartments, condos, mixed use stuff downtown. Okay. It’s good to see growth all over the region. It means there are options for everyone. So what’s your take on the DFW real estate market right now?

It’s a good market. Okay. It’s strong. There are opportunities, but it’s not without its challenges. Right. The economy is good. People are moving here. There’s development happening, so the future looks good. Okay. But you have to stay informed. Know what’s going on and make smart decisions. That’s where Eureka Business Group can help.

Exactly. They’re the experts. They can guide you through it all. Let’s take a break, and when we come back, we’ll look at a specific development that really showcases how DFW is growing and changing. Welcome back to the Deep Dive. We’ve talked about so much today, from those big trends to what’s happening right here in DFW.

Now let’s zero in on one project that really shows how dynamic this market is, the fields in Frisco. Yeah, the fields, that’s a huge project. 2, 545 acres. It’s massive. It’s mixed use, like we’ve been talking about. Yeah, it seems like developers are all about these mixed use projects these days. Mm hmm.

Creating these destinations where you can do everything. Yeah, it’s the live work play concept. So what’s happening at the fields? What makes it so special? Well, they’re building all kinds of housing, from houses to apartments, and then there’s office space. Retail, restaurants, entertainment, parks, trails, you name it.

Wow, that’s a lot. It is. And get this, they’re putting in a 17 acre lagoon. A lagoon? Yeah, right in the middle of this whole thing. It’s going to be like a waterfront district. That’s pretty cool. So it’s like its own little city. What’s the idea behind all this? They want it to be walkable, connected, you can live there, work there, play there, everything.

Sounds like a great place to live. And Frisco’s the perfect place for something like this. It’s been growing like crazy. It has. And the fields is a big part of that growth. It’s bringing in people, businesses, everyone. Frisco’s becoming a real powerhouse. It’s amazing to see. Okay, let’s zoom back out again and talk about something that’s affecting commercial real estate everywhere, ESG.

ESG, yeah, that’s Environmental, Social, and Governance. It’s a big deal. It is. Investors are really focused on it now. It’s not just a side thing anymore. Nope. It’s front and center. Companies are being judged on it. Investment decisions are being made based on it. So what does it mean, really? What are we talking about when we say ESG?

It’s about how a company affects the environment, how it treats people, and how it’s run. Investors want to see that a company is thinking about these things, that it’s doing things the right way. Okay, and how does this apply to commercial real estate? It’s changing everything. How buildings are designed and built, how they’re managed, even how people invest in them.

So, green buildings, solar panels, that kind of thing. Exactly. People want buildings that are good for the environment, that save energy, reduce waste, and are healthy for the people inside. Makes sense. Are developers actually doing this? Oh yeah, a lot of them are getting LED certification for their buildings.

LED, okay. Yeah, it’s like a rating system for how sustainable a building is. And you see more solar panels, green roofs, that kind of stuff. It’s good for the environment, and it can save money in the long run. That’s great. Okay, let’s switch gears one more time and talk about something that always makes investors nervous.

A recession. Yeah, a recession. Are we heading for one? And if so, what’s it going to do to the commercial real estate market? Well, The economy goes up and down, that’s just how it works. So a recession is always a possibility. So are there signs that one is coming? It’s hard to say. Some things look good, some things don’t.

Right. Inflation is going down, but interest rates are still high. The job market is strong, but things are slowing down a bit. Okay, so it’s a mixed bag. But if we do have a recession, how will that affect real estate? It really depends on the type of real estate. Some sectors are more sensitive to the economy than others, like retail, that usually takes a hit when people aren’t spending as much.

Makes sense. What about offices? Offices are already dealing with people working from home. Right. So a recession could make things even tougher for them. What about industrial? That’s been doing really well. Industrial tends to hold up better during a recession. Okay. People still need warehouses and logistics, especially with all the online shopping.

So it really just depends. Yeah, it does. What should investors do? Don’t put all your eggs in one basket. Right, diversify. Exactly. Invest in different types of real estate in different places. Okay. And be smart. Do your due diligence. Make sure you understand the risks before you invest. Think long term.

Good advice. So as we wrap up this deep dive into the DFW commercial real estate market, what are the big takeaways? DFW is a strong market. It’s growing and there’s a lot of opportunity here. Okay. But it’s also complex and constantly changing. You got to stay informed, understand what’s happening locally, and be careful about where you put your money.

And that’s where Eureka Business Group can help. They’re the local experts. Exactly. They can help you make sense of it all and find the right opportunities. That’s right. Well, thanks for joining us on this Valentine’s Day edition of the deep dive. We had a lot of fun exploring the DFW commercial real estate market with you.

We’ll be back soon with another episode until then happy investing.

 Welcome to the deep dive where we really try to get into some of the more interesting trends that are shaping the commercial real estate world, right? And today, we are laser focused on retail, what’s happening right now in early 2025. Yeah. And everything from, the surprising resilience of brick and mortar to the rise of the resale market.

We’re gonna touch on a few notable things happening right here in the DFW Metroplex, of course. Absolutely. And ultimately we’re going to try to explore how these trends could impact you. Whether you’re, a potential investor, or a business owner, or just somebody who’s, interested in this kind of stuff.

One of the things that I think is really fascinating is that, despite the pandemic’s push toward e commerce, physical retail is proving it’s far from dead. Yeah, it’s really interesting to see, we all thought, or a lot of people thought, that, the retail apocalypse was upon us, that everybody was going to be buying everything online.

But what’s fascinating is that, as people have come out of their COVID cocoons they’re wanting to get back out. They’re wanting to go into stores. They want to have that experience again. Those retail apocalypse pronouncements we’re hearing, a few years back, a bit premature for sure.

While the pandemic certainly accelerated online shopping, we’re now seeing, a return. to in person retail. Yeah. And and even expansion in some sectors. Absolutely. And it’s it’s like a reversion to the mean, people tried the online thing exclusively and they’re missing that in person experience.

Yeah. Yeah, for sure. For sure. Take Jim shark, for example, this this UK based. activewear brand that started online is now strategically expanding into physical stores. They recently opened a permanent location in New York City after a successful pop up. Yeah. And now they’re setting their sights on new markets like Dubai.

This move by Gymshark really highlights, I think, a growing trend of online brands recognizing the value of a physical presence. Yeah, they’re looking for that brand building and that customer experience. It’s not just about selling goods anymore. It’s about creating a Tangible brand experience that really resonates with customers and, even established retailers are adapting as well.

Lululemon, for instance, aims to strike a balance between their physical and their online sales, recognizing the importance of both channels for reaching different customer segments. And then Footlocker is another great example. They’re focusing on transforming their stores into community hubs, right?

By offering unique experiences that go beyond just browsing merchandise, so this evolution of brick and mortar retail. I think presents an interesting opportunity for investors. Absolutely. It’s no longer just about investing in a property. It’s about understanding which retailers have the right strategies.

To really thrive in this new landscape. Yeah. Identifying those retailers who are successfully blending online and offline experiences and catering to those evolving customer preferences that’s crucial for making smart investments these days. Absolutely. Absolutely. So let’s shift gears to another trend that’s reshaping retail.

And that’s the remarkable rise of resale. Yes. Particularly the apparel market. Yeah. Secondhand clothing is booming. Driven by Millennials and Gen Z. Yeah. The younger generations. They’re drawn to its sustainability. And the thrill of finding unique items. And this isn’t, this isn’t just a passing fad, right?

Yeah. The resale market is projected to reach a staggering 53 billion by 2025. That’s right. And this growth is impacting, You know, the real estate landscape as well. Resale chains like Plato’s Closet, Once Upon a Child are expanding rapidly, often taking up space in, what we call Class B shopping centers.

Yeah. And landlords are really welcoming these tenants. They’re recognizing their ability to attract that consistent foot traffic and revitalize spaces that might have been struggling in the past. And what’s really intriguing is that even traditional retailers are taking notice of this resale boom.

Yeah. Many are launching their own resale programs or partnering with existing platforms to tap into this growing market. Yeah they’re seeing the writing on the wall. A recent survey by ThredUp, that’s a popular online resale platform, found that nearly three quarters of traditional retail executives Feel the pressure from the growth of resale.

Wow. So brands like American Eagle, Levi, Banana Republic they’re either launching or have already launched their own resale programs. Wow. Wow. So this blurring of lines between traditional and resale. Retail raises an interesting question. Will there be room? for both models in the long run?

I think the answer is likely yes. Okay. But the relationship between the two is going to continue to evolve. We can probably expect to see a more dynamic and perhaps even collaborative retail landscape Okay. in the future. And really what that means is that both the traditional retailers and the resale businesses, they need to be adaptable.

And they need to be innovative. Yeah. to stay ahead of the curve. Now let’s turn our attention to a region that’s really standing out. In the retail sector, and that’s Texas, specifically the four largest metros, Dallas Fort Worth, Austin, Houston, and San Antonio. These markets are demonstrating strong retail performance, bucking some of those national trends.

Yeah. And a key factor that contributes to their success is what we call right sized retail inventory. Okay. What that means is that there’s a healthy balance between supply and demand. Okay. Unlike some areas that experienced overbuilding in the past. So this balance, it helps to maintain a vibrant retail sector.

Yeah. Where businesses can thrive and investors can find some promising opportunities. Okay, so grocery stores, particularly H E B, are playing a significant role in driving new construction in Texas. This really aligns with the broader trend of grocery anchored retail remaining resilient, even during those times of economic uncertainty.

Okay. People still need to eat. They still prioritize those essential shopping needs. And those grocery stores, they serve as anchors that attract other businesses to the shopping center. Yeah, for sure. For sure. And DFW is a prime example of this. We’re seeing a surge in in new. grocery store openings with H E B expanding its footprint alongside those, established players like Sprout and Trader Joe’s.

Yeah. So this influx of grocery stores, not only does it benefit the retailers themselves, but it also creates these opportunities for complementary businesses to, to flourish in their shopping centers. It’s a positive ripple effect that strengthens the overall retail landscape. Now this brings us to a crucial consideration for any. Real estate project. And that’s the capital stacks. Yes. Essentially the financing behind these developments. And it’s interesting to note that even with those higher interest rates we’ve seen in early 2025 there’s still liquidity available.

for commercial real estate projects. That’s right, and you know what’s even more positive is that borrowers are finding that they have more options because of that increased competition among lenders. So this competition is actually driving more favorable terms and deals for those who are seeking financing.

So we’re seeing private equity step in. to fill the gap. Yeah. In cash neutral refinance. Which I think indicates a shift in the lending landscape. Yeah. New players are emerging and potentially changing the dynamics of CRE finance. Okay. Okay. So This influx of capital coupled with predictions of declining interest rates later in the year could create a window of opportunity for investors.

It’s a great time to be thinking about getting into the market. Yeah. Yeah. And it highlights the importance of planning ahead and building relationships with those lenders to be ready to capitalize when market conditions are favorable. Yeah. Speaking of opportunities let’s let’s zoom in on a specific city within the DFW or Metroplex that’s experiencing exceptional growth.

And that’s Frisco, Texas. Frisco is booming. Yeah. This city is witnessing. Like a remarkable surge in development driven by, this thriving innovation ecosystem and major corporate relocations. And their strategic planning and focus on attracting those high quality employers is really paying off.

They’re attracting both businesses and residents leading to a really booming real estate market. Yeah. The numbers are truly impressive in 2024 alone. Frisco saw the equivalent of the Empire State Building’s worth of space leased. Wow. That’s incredible. This speaks volumes about the city’s attractiveness for both businesses and residents.

If you connect this to the bigger picture, Frisco’s growth really reflects a broader trend of population and economic activity shifting to the Sunbelt. This region’s experiencing this really dynamic growth and cities like Frisco are at the forefront. Now before we move on to some of the other fascinating developments in the retail landscape.

Let’s take a closer look at the changing world of malls and shopping centers. Yeah, that’s a big one. It is, and what’s particularly interesting is how some of the traditional like retail giants are adapting to evolving consumer behavior. Walmart, for example, known for its, vast big box stores is making a That’s a kind of surprising move that they’re acquiring a mall near Pittsburgh. They are. They purchased the Monroeville Mall, an annex, and there’s speculation that they might open one of their, signature big box stores within the mall itself.

So it’ll be fascinating to see how they re imagine this space and what this means for the future of malls. This bold move by Walmart really demonstrates that even the largest retailers are recognizing that they need to experiment, they need to adapt. The future of retail might lie in creating these mixed use destinations that offer a diverse range of experiences, not just shopping.

Imagine a mall that seamlessly combines the convenience of a Walmart super center. With specialty shops, restaurants, entertainment venues, and perhaps even residential spaces. Yeah. It’s a compelling vision. It is. And it’s not just Walmart making waves in the in the mall space.

Canadian retail REIT Primaris recently closed two major deals, acquiring full ownership of a mall in Ontario and 50 percent ownership of one in Alberta. So these acquisitions, they add. Like over 1 million square feet of retail space to their portfolio. That’s a big bet on malls. Yeah. Yeah. These strategic moves, I think they signal a strong belief in the future of, those enclosed shopping centers.

It seems investors are seeing the potential to revitalize these spaces and transform them into those vibrant community hubs. Exactly. And speaking of revitalization. Yes. We’re also witnessing a kind of resurgence of interest in brick and mortar bookstores. Really? Yeah. Barnes and Noble is planning to open like over 60 new stores this year, which is a record setting number for them.

Yeah. So this is a positive sign, I think, for the bookselling industry, which faced some challenges in recent years. Yeah. So it’s encouraging to see this. This comeback, bookstores offer like this unique browsing experience that’s simply impossible to replicate online.

You can’t smell a book online, right? And they often serve as these community gathering places, fostering a love of reading and hosting events that bring people together. So this resurgence, I think it underscores the the enduring appeal of those physical stores and the power of, creating an experience that goes beyond just purchasing a book.

A product. Absolutely. It’s about more than just the transaction. And on a slightly different note, the the children’s clothing retailer, Bye Bye Baby. Yeah. Is getting a new lease on life. Okay. After being acquired by Beyond Inc. for five million dollars. Oh, wow. Yeah. So it appears that Beyond Inc.

sees potential. Yeah. In both the online and the brick and mortar presence of of Bye Bye Baby and Bye Bye Baby. The brand has a strong future in this evolving retail landscape. So this is, positive news, I think, for parents and fans of the brand who are, concerned about its future.

It highlights the resilience, I think, of well established brands that adapt to changing market dynamics. And speaking of international retail South Korea’s CJ Olive Young. Okay. Is making its debut in the U. S. market. Okay. With its first store opening in Los Angeles. This expansion is fueled by the, the growing popularity of Korean beauty products here in the U.

S. So it’ll be interesting to, to observe how American consumers respond to this new retail concept. Yeah. And whether it sparks a broader trend of international brands entering the U. S. market. The entry of international brands like C. J. Olive Young really adds to the diversity of the retail landscape, and it introduces consumers to these new products and new experiences.

And, while some retailers are expanding, others, unfortunately are facing challenges. The discount retailer, Bargain Hunt, recently filed for bankruptcy, and is shutting down all 92 of its stores. That’s a shame. Yeah. This serves as a reminder of, The competitive nature, I think, of the retail industry and how some businesses struggle to, to adapt to evolving consumer preferences and and economic conditions.

Yeah. It really underscores the importance, I think, of. Of staying ahead of the curve and constantly innovating to, to remain relevant in the eyes of of those consumers. Absolutely. The closure of Bargain Hunt is a loss for its employees and customers, who enjoyed its unique treasure hunt shopping experience.

Yeah. But it also presents an opportunity potentially for other retailers to fill the void and cater to the needs of Bargain Hunt’s former customer base. Yeah. Yeah. One retailer’s Misfortune is another one’s opportunity. So the retail landscape is in constant flux, with both, successes and challenges.

Yeah. And those who can adapt and innovate and understand those nuances of the market are more likely to thrive. Absolutely. As we move deeper into 2025 we’ll continue to track these trends and analyze their impact on the market. Definitely. So speaking of of the market, let’s let’s take a closer look at some recent trends.

data on single pennant retail sales volume and and cap rates. These metrics provide valuable insights, I think, into the current state of the market and can inform investment decisions. And I’m always interested to see, how these figures are fluctuating because they can indicate emerging trends and and potential opportunities.

Absolutely. According to a recent report from Northmark, the single tenant net lease retail sector, it experienced both highs and lows in 2024 in terms of investment volume. Interesting. Interesting. So let’s break down those fluctuations a bit. What were the specific ups and downs that characterize the market?

The third quarter of 2024, we saw a significant jump in investment volume, reaching 2. 4 billion in transactions. Okay. So that represented a notable increase from the previous quarter. However, Okay. This momentum didn’t carry over. into the fourth quarter. So what happened in the fourth quarter that led to this change in momentum?

Investment activity just slowed down considerably. Okay. Total deal value for the year, it came in at 8. 6 billion. Okay. Making 2024 the slowest year for this sector in over a decade. Wow. So this slowdown, it can be attributed to several factors. Okay. Including rising interest rates. Yeah, that makes sense.

Higher borrowing costs can certainly make investors more cautious, because it affects their potential returns. Exactly. Rising interest rates make financing more expensive, which, which impacts an investor’s profitability. Yeah. And this leads to, greater selectivity in the deals they pursue.

And it’s not just interest rates that are influencing the market. Cap rates, which essentially, represent the rate of return an investor can. can expect on a property are also rising. Yeah. And the single tenant net lease sector cap rates have been steadily climbing in, in recent quarters.

Okay. And as of early 2025, they sit at 6. 74 percent on average. Okay. So this is a significant increase from the 6 percent mark. They hit earlier in 2024. So what does this rise in? And cap rates signify for investors? Essentially it means that properties are becoming relatively more expensive Okay.

Compared to their net operating income. Okay. So investors are having to pay more Okay. For that same level of income. So it, it appears that the the single tenant retail market is facing some headwinds right now. Yeah. With both, rising interest rates and cap rates. Yeah. Contributing to a slowdown in Yeah.

Investment activity. Yeah. That’s a fair assessment. However, it’s important to remember that single tenant net lease properties still offer several advantages that make them attractive to certain investors. So what are some of those inherent advantages that continue to draw investors to this asset class?

Single tenant net lease properties they often come with long term leases with stable tenants. They typically involve minimal landlord responsibilities and they offer predictable cash flow. Which can be really appealing to investors seeking stability and lower risk.

Okay. Okay, so despite those challenges, these inherent advantages of single tenant retail, they continue to attract certain investors. Absolutely. And it’s worth noting that the market is also being driven by positive trends, such as the ongoing expansion of those popular retailers Dollar General, Starbucks, Walmart.

These companies are investing in new store formats, technology and omni channel strategies to stay ahead of the curve. It’s interesting to see how those major players are adapting to this evolving retail landscape and their continued investment in, new store formats, technology and omni channel strategies.

I think it. It indicates a positive outlook for the future of retail. They understand that consumers still value Convenience, affordability, and a seamless shopping experience, whether it’s online or in store. And speaking of convenience and affordability let’s touch on another trend that’s gaining traction in the retail world.

And that’s the success of of dollar stores. Dollar stores are doing really well. Yeah. Dollar General, in particular is experiencing impressive growth. Yeah, they recently appointed a new executive vice president to oversee their expansion efforts. Okay. That really solidifies their commitment to growth.

Can you elaborate on, on, on Dollar General’s expansion plans? Yeah. And the strategy behind their their growth. Sure. Their focus is on national store expansion developing processes to improve efficiency and implementing initiatives to enhance their overall operations. So they’re also actively remodeling existing stores and relocating those underperforming locations.

So they’re not just focused on. Opening new stores. But also optimizing their existing footprint. Yeah. To maximize profitability. Exactly. And their efforts seem to be yielding positive results. Their latest earnings report. Yeah. Announced a 5 percent increase in net sales year over year.

Wow. Which is a very positive sign in the current retail environment. Yeah, for sure. For sure. Dollar General’s success, I think, it underscores that persistent demand for, those affordable and convenient shopping options, particularly in rural areas and smaller communities.

And this demand is likely to continue, especially if economic conditions remain uncertain. Consumers tend to prioritize those. of value oriented retailers when they’re, facing economic challenges. Absolutely. Now let’s turn our attention to another crucial aspect of the retail landscape, and that’s the transformative role of technology.

Technology is huge. Yeah. Technology is becoming, Increasingly essential for retailers of all sources. It’s no longer just about, having an online presence. Yeah. It’s about leveraging data. Artificial intelligence and automation. Yeah. Yeah. To create those personalized.

And seamless shopping experiences. Yeah. So many retailers are are investing heavily in these areas. What are some of the the key technological trends that you’re observing? Okay. In the in the retail sector? One, one major trend is the use of artificial intelligence to, to personalize product recommendations, optimize pricing, and improve inventory management.

Okay. Okay. AI’s ability to, analyze these vast amounts of data to understand consumer behavior and predict future trends it’s really quite remarkable. It is. Another, significant trend is the rise of cashierless checkout technology. Oh, yeah. This innovation allows shoppers to, to simply walk out of a store with their purchases without waiting in line.

And I’ve personally experienced this technology in a few stores. Yep. And it’s incredibly convenient. Yeah. It definitely enhances the shopping experience by, Streamlining the checkout process and from a retailer’s perspective, yeah. It can help to reduce labor costs, and improve operational efficiency. Yeah, no it’s evident that technology is playing a transformative role. It is in the in the retail industry and. Alongside this technological evolution, another exciting trend is the growing emphasis on experiential retail. Yeah, consumers are increasingly seeking experiences that that engage their senses and create these lasting memories rather than, simply purchasing products.

Many retailers are incorporating entertainment, dining, and social elements into their store designs. To create these immersive experiences. Yeah, they’re recognizing that they need to offer something, unique and engaging to draw those shoppers away from their screens and into their stores.

It’s fascinating to see how retailers are getting creative with their store concepts, creating spaces that are inviting, interactive, and memorable. This trend is likely to continue as retailers strive to, differentiate themselves and foster a loyal customer base. Yeah. Yeah.

Seems like the future of retail lies in, in finding the right balance between online and offline experiences, leveraging technology and providing both value and convenience to consumers. That’s it. That’s a great summation. The retail landscape is dynamic and constantly evolving, and those who can adapt, innovate, and understand the nuances of the market will be the ones who thrive.

Now as we delve deeper into the retail sector. Let’s let’s take a closer look at some of the specific challenges and opportunities that are shaping the industry in in 2025. All right. One of the most significant challenges as we’ve already discussed is the the rising cost of capital.

Interest rates, they remain relatively high. Yeah. Which makes it more expensive for retailers to, to finance their operations. You’re right. And expansion plans. And this is particularly challenging for smaller retailers. Yeah. Who may not have the same access to capital.

As their larger counterparts. Another challenge is the ongoing labor shortage. Oh, yeah. Retailers are finding it increasingly difficult to find and retain qualified employees, especially in a tight labor market. And this shortage is leading to higher wages and increased competition for talent, which can put pressure on retailers profit margins.

Absolutely. And on the consumer side, inflation continues to be a concern. And, consumers are becoming more, more prepared. price sensitive and are seeking ways to, to stretch their budgets. Yeah. And this puts pressure on retailers to maintain those competitive prices, which can be difficult in an environment of rising costs.

So it, it seems like retailers are facing a confluence of challenges, rising costs, labor shortages and inflationary pressures. A lot to juggle. Yeah. Yeah. But it’s important to remember, I think that amidst these challenges, there are also significant opportunities for retailers who can who can adapt and innovate.

Absolutely. So let’s shift our focus to those opportunities. What are some of the the bright spots on the horizon for the for the retail sector? One of the biggest opportunities, I think, is the continued growth of e commerce. Okay. Online sales are still on the rise.

And this trend is projected to continue. So retailers who can create a seamless and personalized online shopping experience. Are well positioned for success. Absolutely. Another opportunity lies in the increasing demand for convenience. Okay. Consumers are busier than ever and are looking for ways to save time and simplify their lives.

So retailers who offer convenient shopping options such as curbside pickup, home delivery and mobile ordering. Yeah. are meeting this demand head on. And finally, there’s a growing trend towards sustainability. Consumers are becoming more, more environmentally conscious.

Yeah. And are seeking brands that, that align with their values. Okay. So retailers who can embrace sustainable practices and offer those eco friendly products are likely to resonate with this growing segment of consumers. Absolutely. The retail landscape is constantly evolving and it presents a dynamic and exciting environment for both businesses and investors.

Now, as we wrap up. Part one of our deep dive into retail real estate. Yeah. Let’s contemplate a question that’s relevant to, to both investors and consumers. Okay. What does the future hold for malls and shopping centers? That’s the million dollar question. It is, yeah. This question has been debated for years, especially with with the rise of online shopping.

But malls and shopping centers they’re not going away anytime soon. No. They’re simply evolving. To meet the changing needs and expectations of of consumers. They’re having to adapt. Yeah I agree. They’re transforming to provide a more, more holistic experience.

Beyond just shopping. Exactly. We’re seeing a shift towards these mixed use developments that combine retail, residential, office, and entertainment spaces. And these developments are creating vibrant community hubs that offer a diverse range of options for everyone. And they’re attracting a new generation of consumers who are looking for those experiences that go beyond just purchasing products.

Yeah it’s fascinating to witness. It is. How these spaces are being reimagined. Yeah. To create, more, more engaging. Yeah. And interactive experiences. Absolutely. As we continue our deep dive in part two. Okay. We’ll explore the specific trends shaping the future of malls and shopping centers.

So we’ll delve into topics like. Experiential retail, the rise of food halls, the integration of technology. Looking forward to it. So stay tuned for more insights and analysis as we continue to unpack the world of of retail real estate. Welcome back to the final part of our deep dive into retail real estate.

We’ve we cover a lot of ground, from the the surprising resilience of brick and mortar stores to the exciting rise of experiential retail and the transformative power of technology. And we’ve also explored how crucial it is to adapt to change, understand those local market dynamics, like the healthy balance of retail inventory we see in Texas and really just sees the many opportunities that this ever evolving sector offers.

Let’s zero in on a few. Key takeaways and strategies to help you navigate this dynamic market. First it’s clear that the lines between physical and digital retail are becoming increasingly blurred. Yeah. And successful retailers today, they’re really embracing that, omni channel approach creating a seamless experience for consumers, whether they’re shopping online in store or, through mobile apps. So for investors, this means seeking out those retailers who truly understand their target audience and are investing in technology to create those Personalized and engaging shopping experiences across all channels.

Yeah. And for business owners it’s about finding those innovative ways to integrate those online and offline operations, to build that cohesive brand experience. Think about leveraging technology to personalize offers, provide those convenient. Pick up and delivery options and gather that valuable customer data to improve your strategy.

Another crucial takeaway is the rising importance of of experience. Yeah. Consumers are no longer just looking to. to buy products. They’re seeking those immersive experiences that engage their senses, create lasting memories, and foster a sense of connection. So some malls and shopping centers, they’re responding to this shift by transforming into destinations that offer that diverse mix of retail, dining, entertainment, and even residential spaces.

And this trend toward mixed use developments. This is creating vibrant community hubs. It is. That attract a wide range of tenants and shoppers and it creates a more dynamic and engaging environment. So for investors this means seeking out properties that are well positioned to benefit from this trend.

Consider those locations with Strong demographics, a mix of existing and planned amenities, and a developer with a proven track record of success. And for business owners, it’s about finding creative ways to enhance the customer experience within your space. Think about incorporating those elements of entertainment, personalization, and community engagement into your into your store design and marketing efforts.

Now let’s let’s talk about a critical aspect that often gets overlooked in real estate discussions, and that’s the human element. Ultimately, the success of any retail venture depends on people. So we’re talking about, attracting the right tenants for your property, cultivating a positive work environment for your employees and building those genuine relationships with your customers.

Exactly. As an investor, carefully evaluate the tenant mix of a potential property. Yeah. Look for businesses that complement each other and create that synergistic environment that attracts that diverse customer base. And enhances the overall appeal of The property and as a business owner, remember that your employees, they’re your brand ambassadors investing in training and development programs, empowers them to provide that exceptional customer service and create a welcoming atmosphere for your customers.

And never never underestimate the power of community engagement, right? Get involved in local events, support local charities and create those opportunities for your for your customers to connect with each other and your brand on a deeper level. Building those strong relationships within the community, can lead to increased customer loyalty and generate those valuable word of mouth referrals, which are essential for success in today’s competitive market.

As we as we wrap up our deep dive into retail real estate, remember that the key to success lies in, in understanding the trends, adapting to change and focusing on creating value for both investors and and consumers. And if you’re looking for expert guidance to navigate the complexities of the DFW retail market.

Yeah. Eureka Business Group is here to help. We are. We have a deep understanding of the local landscape. Yeah. And a passion for helping our clients achieve their, they’re real estate goals. We specialize in connecting businesses with the perfect retail spaces and assisting investors in finding those profitable opportunities that align with their investment strategies.

So contact us today and let’s let’s explore the possibilities together. Thanks for joining us on the deep dive. We we look forward to exploring more fascinating insights with you in our upcoming episodes.

 Welcome to this week’s deep dive into commercial real estate brought to you by Eureka business group, where you’re a retail specialist here in the Dallas Fort Worth market. And, uh, we’re excited to break down, you know, some of the latest news impacting you as a potential investor, at least. Yeah, we’ve got, uh, quite a bit to cover today from the national landscape to what’s happening.

You know, right here in DFW. So, uh, let’s just jump right in. Okay, great. So first let’s zoom out, right? Let’s take a look at the overall health of the U. S. commercial property market. How are things looking nationally? Well, I think despite some ongoing challenges, you know, there are definitely some signs, some potential signs of recovery.

I mean, prices, for example, prices are on the rise and that’s fueled by, you know, an increase in large. Scale deals and, um, an expansion of economic activity across various sectors, right? So this suggests that there’s, you know, growing confidence in commercial real estate at least. Yeah, that’s, that’s encouraging to hear for sure.

Yeah. But you know, on the other hand, it’s important to stay informed about potential challenges too, right? Yeah. And, and I understand there’s some concerns about rising CMBS delinquency rates. Yeah. Particularly, I think this is in the office sector. Yes. Yeah. So CMBS stands for Commercial Mortgage Backed Securities, which are essentially, you know, bundles of loans tied to commercial properties.

So rising delinquency rate in this area, you know, particularly in the office sector. Kind of suggests that, well, while some sectors are, you know, bouncing back nicely, others are still, you know, facing some headwinds. Okay. So we’ve got kind of a mixed bag, right? At the national level. I mean, with some, some positive signs of recovery, but, but also some areas that, that might require, you know, a more cautious approach.

Now let’s, let’s kind of shift our focus a little bit. Let’s shift our focus to the DFW market, you know, or where, where we are. What’s the, what’s the latest on the office market here? What are you seeing? Okay. Thanks. Well, the DFW office market is, is finally showing some signs of life, which is great. Uh, for the first time since 2022, we’re seeing positive net absorption.

And that means, you know, more office space is being leased than vacated. So this is a significant turnaround really after years of stagnation. And it, and it really does suggest a growing demand for office space in the region. Wow. That’s, that’s great news really for, for anyone considering investing in office properties here.

What’s driving this? This renewed demand for office space in DFW, do you think? Well, North Texas, and Collin County in particular, is experiencing this sort of, uh, population boom, right? And this influx of people is attracting major corporations, who are setting up their headquarters here. And that’s, you know, bringing new jobs.

So this population and job growth is fueling demand for various commercial real estate sectors, including retail. You know, more people means more need for places to work, places to shop, places to dine, which is, you know, good news, for investors at least. Yeah, it’s all connected. And speaking of retail, um, I understand there’s been this kind of surprising shift in Texas rent prices.

You know, we always hear about Austin being so expensive, but, but it looks like Dallas is kind of taking the lead there. Yeah. For the first time since 2015, Dallas has overtaken Austin as the Texas Metro with the highest rent prices. So this is interesting because it suggests It’s this kind of shift, right, in the dynamics of the Texas real estate market, and it may, you know, create opportunities for savvy investors.

It’s something to watch closely, you know, if you’re considering retail properties in both Dallas and the wider DFW area. Yeah, definitely. Definitely something to keep in mind for sure. Now, let’s, let’s dive into the world of retail, right? I mean, this is, this is our specialty here at Eureka Business Group.

What, what are some of the key trends that you’re seeing, um, you know, in this sector in particular? Yeah. Well, one of the most interesting trends, I think, is the explosive growth of, uh, you know, the second hand market. Um, I mean, it’s become a 53 billion industry, and it’s driven by, you know, a growing preference for, you know, sustainable and unique finds, especially among, you know, younger generations.

So this signifies a shift in consumer preferences towards, you know, more conscious consumption, and, you know, creates opportunities for retailers who can You know, tap into this market. Yeah, for someone looking to invest in retail, I mean, this secondhand market trend seems, seems like a significant development.

Are there any specific examples of how this trend is playing out in the DFW market, you know, locally? Absolutely. Companies like Plato’s Closet and Uptown Cheapskate, for example, Which specialize in, you know, secondhand clothing and accessories. They’re seeing success with, um, you know, large store footprints, often in, in class B shopping centers.

So this suggests that there’s, you know, there’s a growing demand for these types of businesses and that they can be successful in, in a variety of locations. That’s a, that’s a valuable insight for sure, you know, for potential investors looking at retail properties. Yeah. Um, and it’s, it’s also interesting to see that even traditional retailers are kind of, they’re catching onto this trend, right?

American Eagle, H& M, Kate Spade, they’re all incorporating resale into their businesses. It seems like a smart strategy to, you know, to adapt to these changing consumer preferences and potentially, you know, tap into a new revenue stream. It certainly is. Yeah. And while we’re on the topic of, uh, you know, retail success stories, we can’t forget about the fast casual restaurant industry, right?

Yeah. Brands like Chipotle, Kava, and Wingstop. These guys are experiencing rapid expansion, record profits. Yeah. And, you know, that makes them, you know, attractive tenants for shopping centers. Yeah. What’s, what’s driving the success of these fast casual restaurants, um, you know, in such a competitive market?

I think they’re attracting, you know, a pretty loyal customer base, honestly, by offering, you know, quality food at affordable prices, all within a, you know, convenient and efficient dining experience. So these brands are appealing to a wide range of consumers and they’re often, you know, sought after tenants, right, by landlords who are looking to attract foot traffic and create, you know, a desirable tenant mix.

Right. Yeah. A strong tenant mix can make a property more, more attractive. You know, to investors. Now, let’s, let’s kind of shift gears for a second, um, and talk about a technology that’s, you know, been making headlines across, across all industries, really artificial intelligence, AI. How is this technology impacting the retail landscape?

Do you think? Well, AI is being used in a variety of ways. To enhance, you know, the retail experience, companies like Lowe’s, for instance, they’re using AI powered digital twins of their stores to optimize layouts, optimize operations, you know, improving efficiency and potentially reducing costs. Walmart and Amazon are, you know, they’re kind of leading the charge in AI driven logistics, so, you know, streamlining their supply chains, enhancing delivery capabilities, things like that.

So AI is not just. You know, this futuristic concept, it’s already being implemented in practical ways that, you know, are impacting the retail industry. That’s fascinating. But AI’s impact, I mean, it extends beyond retail, doesn’t it? I mean, it’s going into all these different areas. Yes, yes, absolutely. The growth of AI, you know, is creating a surge in demand for data storage facilities.

And we’re seeing companies, you know, like DeepSeek, which is a, Uh, Chinese AI startup, they’re making waves in the tech world with their innovative technology that relies on, uh, you know, older generation NVIDIA chips. And this is making AI more accessible and affordable, which leads to, you know, even more increased demand for data storage.

Yeah, I can see how, I can see how that would happen. And this increased demand for data storage, I mean It seems like you would have a significant impact on, you know, the real estate market. Are there any notable developments in this area, would you say? Well, there’s the Stargate project, for example, which is a joint venture backed by, uh, you know, Oracle, SoftBank and others.

And they’re aiming to invest 500 billion in new data centers. So this massive investment highlights, you know. The scale of the AI boom and its potential impact on real estate. I mean, data centers require large amounts of space. They require specialized infrastructure. So it’s creating opportunities, you know, for developers and investors.

However, there are also some, you know, challenges associated with this as well. What kind of challenges are we, are we talking about here? Well, you know, supply chain bottlenecks and a shortage of, you know, skilled labor are making it difficult to keep up with the, the rapidly increasing demand for these data centers.

These challenges, I think, underscore the importance of, you know, careful planning, careful execution for any project in the sector. So while, while there’s, you know, potential for, for profit, investors need to be aware of the, you know, the complexities. Involved in data center development, now shifting gears to the industrial sector.

Right. We’ve seen this continued boom in e commerce and a trend toward, you know, reshoring, bringing manufacturing back to the U. S. How, how is all of this impacting the industrial real estate market? I mean, the industrial sector is experiencing, you know, really robust growth. Thanks to these trends.

Investors are drawn to. You know, industrial properties for, you know, their stability and their consistent growth. E commerce requires, you know, vast warehouse and distribution centers. Reshoring is bringing manufacturing facilities back to the U. S., all of which contribute to a strong demand, really, for industrial space.

Yeah, but even in a, even in a strong sector like industrial, you know, there’s always, there’s always a need to adapt. To evolve, right? What, what are some of the key trends that you’re, that you’re seeing kind of shaping the industrial real estate market today? One of the key trends I think Is is the rise of, you know, flex space, which allows tenants to kind of customize their industrial spaces to meet their specific needs, and this flexibility, I think, is attractive in today’s, you know, rapidly changing business environment.

Another important trend, I think, is reshoring itself. Right. Which is creating opportunities for developers and investors to cater to the needs of these manufacturers who are, you know, returning to the U. S. OK, so for someone, you know, interested in industrial real estate, I mean, understanding these trends is crucial, right, for for making those informed investment decisions.

Now, before we before we wrap up this part of our deep dive. Let’s talk about the financial landscape, which can be, you know, a bit uncertain at times. Interest rates have been a, you know, a hot topic lately. What’s, what’s the latest thinking on where rates are headed? Well, there’s a lot of, you know, discussion, right?

Yeah. About whether interest rates will stay, you know, higher for longer, or eventually return to what we might consider normal levels. It’s, it’s a key consideration for real estate investors. Because interest rates directly impact borrowing costs. Yeah. That’s a, that’s a crucial point for sure. What insights can you offer to our listeners who might be, you know, concerned about the impact of interest rates, um, on their investments?

Well, while, you know, some investors are feeling apprehensive about the potential for rates to remain high, historical data kind of suggests that, um, you know, this recent increase in rates might simply be a reversion, right, to the long term average. If that’s the case, it could, you know, signal a, a normalization of the market rather than a sustained period of, you know, high interest rates.

It’s important for investors, I think, to, to consider the bigger picture and not get caught up in, in short term, you know, market fluctuations. Yeah, that’s a, that’s a valuable perspective. So, so while it’s, while it’s essential to stay informed, you know, about interest rate movements. a long term view, you know, can help investors make, you know, more strategic decisions.

Now, besides traditional financing options, are there any, any alternative financing avenues, um, you know, emerging in the commercial real estate market? Yeah, we’re seeing this, uh, you know, surge in short term property financing from non bank lenders. And the surge, you know, indicates that borrowers are, they’re seeking those alternative financing options, especially You know, traditional banks remaining cautious in the current economic climate.

Okay. Yeah. This increased activity from non bank lenders. I mean, it seems like a positive development, right? For borrowers who, you know, who might not qualify for, you know, traditional loans. It also suggests, you know, a dynamic and evolving lending market, which could benefit, you know, those who are, those who are seeking, um, creative financing solutions.

Now, before, before we move on to the next part of our deep dive, let’s, let’s kind of recap, you know, what, what we’ve covered so far about the national commercial real estate market. And, and the trends that are, you know, shaping the, the DFW market. Sure. Yeah. I mean, the U. S. commercial real estate market is, you know, showing those signs of recovery with prices trending upwards, increased activity, you know, in, in large scale deals.

However, it’s important to, you know, be aware of the potential challenges like those rising CMBS delinquency rates, particularly in the office sector. Now, in the DFW market, we’re seeing some positive signs, you know, in the office sector with, with increased demand for space driven by, you know, population growth and corporate relocations.

The retail sector is also, you know, experiencing growth with the rise of, of the secondhand market and the continued success of, of fast casual restaurants. Right. And we’ve also discussed the impact of AI. Yeah. Right? On, on the retail landscape. Yeah. And the broader real estate market. Creating those opportunities in, in areas like, like data storage facilities.

The industrial sector is also, you know, quite robust thanks to that e commerce boom and that trend towards reshoring. Yeah. It’s, it’s a dynamic market really with, with opportunities and challenges and staying informed about, you know, the latest trends, working with experienced professionals like, you know, Eureka Business Group can help investors make, you know, more strategic decisions.

That’s a, that’s a great point. Understanding the nuances of, of each sector, recognizing, you know, potential challenges, working with experts. I mean, it can make a significant difference. Now, as we head into the next part of our, of our deep dive, um, I’m, I’m curious to explore some, you know, specific examples of, of successful projects and developments in the DFW market.

Um, you know, stay with us as we, as we delve deeper into the, you know, the exciting opportunities available in this, Yeah. We’ll get into some of those specifics next. Yeah. But before we, uh, move on to those specific projects, I, uh, I’d like to add that this surge in short term property financing from, you know, non bank lenders, it, it really signifies a dynamic and evolving lending market.

And, um, you know, that can benefit borrowers who are seeking alternative financing options. You know, it’s about finding the right fit for, for your specific needs and circumstances. That’s a, that’s an excellent point. Having options is always a, is always a good thing, especially in in today’s market. Now, you mentioned some exciting projects and developments that are happening in the DFW market.

Can you share some, some specific examples that that illustrate these trends that we’ve been discussing? Absolutely. Um, let’s start with the industrial sector. There’s this, uh, massive project underway in, uh, Rockdale, Texas. It’s a 5, 300 acre advanced manufacturing site being developed on a former aluminum smelter site.

So it’s a, it’s a testament to the reshoring trend that we talked about earlier. And it really demonstrates the scale of investment that’s flowing into, into the sector. Wow. That, that’s a huge project. Yeah. What makes this site particularly attractive for, for manufacturers? Well, it boasts abundant power, water rail, and interstate access, essential infrastructure for, for large scale manufacturing operations, but it’s not just an industrial park.

It’s being marketed as a mixed use super site with plans for residential, retail, office, hospitality, and leader facilities. That’s, that’s fascinating. Integrating those. those different elements into, into a single development creates a more, a more holistic environment for, for businesses and their employees.

It’s a smart move that recognizes the, the interconnectedness of, of various aspects of life and, and work. Exactly. And, and this type of, you know, integrated development can be a real draw for companies looking to relocate or expand. You know, it offers convenience, a sense of community and, and the potential for, for increased productivity.

It’s a win win for, for everyone involved. And, and speaking of, you know, strategic moves, another company making headlines in the, in the industrial sector is EQT Exeter. We touched on their, on their decision to shift their focus entirely to industrial real estate earlier. Can you elaborate on, on why this move is, is so significant?

Well, EQT Exeter is a, is a major player in the, in the real estate industry. And uh, Their decision to pull out of multifamily investments and go all in on industrial underscores the confidence that that institutional investors have in the long term growth potential of industrial property. So it sends a strong signal to other investors that that this sector is is a smart bet in in today’s dynamic market.

So for someone looking to, you know, diversify their portfolio or enter the commercial real estate market, I mean, industrial properties seem like a very attractive option. Now, let’s shift gears again and talk about the financial landscape. We talked earlier about the uncertainty surrounding interest rates and, um, you know, some investors are concerned about the possibility of rates staying higher for longer.

How can investors navigate this uncertainty and make, you know, informed decisions? It’s understandable that that investors are feeling a bit apprehensive. The recent run up in U. S. Treasury bond yields has has certainly added to the to the uncertainty. However, it’s it’s essential to to consider the historical context.

The data suggests that this recent increase in bond yields may simply be a reversion to the long term average. And this perspective encourages, you know, informed decision making rather than reacting to to short term fluctuations. So while While it’s important to stay informed, you know, about interest rate movements, a, a long term perspective can help investors make, you know, more strategic decisions.

Now we’ve, we’ve talked a lot about the, the industrial sector. What about retail? What are some of the opportunities and trends that you’re seeing in the, in the DFW retail market? Well, the, the DFW retail sector remains strong, you know, the population demand for, for convenient and high quality retail experiences and the adaptability of, of businesses to meet those demands all point to a, to a positive future.

And don’t forget the role of technology in shaping the retail landscape. AI is already revolutionizing, you know, supply chains, store layouts, and, and customer experiences. You, you’re right, keeping up with, with these technological advancements is, is crucial for, for retailers and, and investors alike. Now, earlier you mentioned the rise of, of non bank lenders in, in the commercial real estate market.

Can, can you elaborate on the, on the benefits that they, that they offer to, to borrowers? Yeah, non bank lenders are often more willing to take on, on risk, which can be, you know, beneficial for developers and investors looking for, you know, creative financing solutions. And their flexibility can be a real asset in a, in a market that’s, that’s constantly evolving.

You know, they provide alternative financing options for, for borrowers who may not qualify for traditional bank loans, which increases liquidity in the market and provides more options for, for borrowers. That’s, that’s great for, for borrowers seeking, seeking funding for their projects. Yeah. Now, let’s, let’s zoom back in on the, on the DFW retail scene.

We talked about the success of, of fast casual restaurants and, and resale concepts. What are some other trends that are, that are catching your attention? One trend I find particularly interesting is the, the growing popularity of, of food halls. These curated culinary destinations offer a. A diverse mix of dining options, often with a focus on on local and artisanal vendors.

And they’re, they’re becoming social hubs, drawing crowds with their, their vibrant atmosphere and, and unique culinary experiences. It’s like a, like a modern take on the, on the traditional shopping mall food court, but, but with a much more elevated and sophisticated vibe. Precisely. And, and these food halls are often strategically located in high traffic areas like, like mixed use developments and, and revitalized urban districts.

So they’re becoming anchors for, for these developments, attracting foot traffic and creating a sense of community. It sounds like a, like a smart strategy for developers who are, you know, looking to create, create vibrant and, and, and attractive destinations. Yeah. It’s a great example of how, you know, creative retail concepts can, can revitalize areas and, and.

drive economic growth. Now, we’ve all heard about the, the challenges that, that brick and mortar bookstores are facing with the rise of, of online retailers. I mean, is, is there any, is there any hope for these, for these traditional bookstores? Absolutely. Brick and mortar bookstores are, are making a comeback.

There’s, there’s something special about the, the experience of browsing a physical bookstore, discovering new authors and, and connecting with. fellow book lovers and smart retailers are capitalizing on this resurgence of interest in physical bookstores. Look, what are these, what are these bookstores doing to, to adapt and thrive in the, in the digital age?

Well, they’re creating, you know, welcoming and engaging spaces. They’re, they’re hosting events and, and offering a carefully curated selection of books that appeal to their target audience. They’re incorporating cafes, co working spaces, and, and other amenities to enhance the digital It’s the, the customer experience.

So they’re, they’re becoming community gathering spots, blurring the lines between, between retail and, and lifestyle destinations. So it’s a great example of how, you know, brick and mortar retailers can, can adapt and thrive in the digital age by, by offering a unique and valuable experience that, that online retailers simply can’t replicate.

And it’s, it’s encouraging to see these, these traditional businesses adapt and find, you know, new ways to, to connect with, with customers. Now, before, before we move to the, to the final part of our, of our deep dive, I think it would be helpful to, to recap some of the, the key takeaways from our, from our discussion so far.

Sure. Yeah. I mean, we’ve, we’ve covered a lot of ground from the, the overall health of the, uh, the commercial real estate market to the, the specific trends that are shaping the retail and industrial sectors in, in DFW we’ve, we’ve seen how factors like population growth, technological advancements, and shifting consumer preferences are, are driving change in the market.

We’ve also highlighted the importance of, you know, adaptability, innovation, and, and strategic decision making for, for both businesses and, And investors, the commercial real estate landscape is, is constantly arriving and staying ahead of the curve is, is essential for, for success. We’ve also seen examples of how, how different sectors are converging, creating, creating exciting new opportunities for investors who are willing to, you know, think outside the box.

The, the 5, 300 acre mixed use development in, in Rockdale and, and the resurgence of food halls are, are just two examples of, of this trend. Now, as, as we move into the, into the final part of our deep dive, let’s shift our focus to the, the future of commercial real estate and explore some of the emerging trends that, that will shape the industry in the, in the years to come.

Welcome back to the final part of our deep dive into commercial real estate. You know, with Eureka Business Group, we’ve covered a lot of ground today from, you know, national trends to specific developments right here in DFW. Now let’s, let’s kind of look ahead a little bit, right. And consider what the future holds for.

for commercial real estate. What do you, what are you thinking about? Well, one of the most fascinating and potentially disruptive trends I’m seeing is, is the convergence of various real estate sectors. You know, the lines are blurring between traditional categories like, like retail office and industrial.

Uh, we’re seeing these, you know, mixed use developments that, that seamlessly integrate these sectors and it’s creating, you know, these vibrant and dynamic communities. Yeah, we, we discussed that, uh, that 5, 300 acre advanced manufacturing site in, in Rockdale, Texas, right? Yeah. Which, which is a great example of this trend.

It’s not just an industrial park, but a, you know, a mixed use super site with plans for, for residential retail office, hospitality, and, and leisure facilities. And this kind of, you know, integrated development is, is becoming increasingly common. What’s driving this convergence, do you think? Well, it’s a, it’s a combination of factors, really.

Uh, the rise of e commerce, for instance, that’s blurred the lines between, between retail and industrial, creating a need for, you know, logistics and distribution hubs that are integrated with, with retail spaces. Um, the shift towards, you know, remote work and flexible work arrangements, that’s prompting companies to rethink their office needs.

So that’s leading to the development of, you know, co working spaces and mixed use environments that cater to, you know, a more, a more mobile workforce. And, and let’s not forget You know, the, the growing demand for experiences, people, people want to live, work and play in vibrant communities that, you know, offer a mix of amenities and opportunities and these integrated developments cater to that demand, right?

Creating a sense of place and fostering a strong community spirit. I mean, this all sounds very promising for the future of, of real estate, but I imagine this convergence also creates new challenges for, for investors. Absolutely. It requires a more, a more holistic and integrated approach, I think, to, to real estate investment.

One that considers the interconnectedness of, of different sectors and the evolving needs of, of businesses and consumers. It’s no longer enough to specialize in, in just one type of property, you know, successful investors will need to understand the broader market dynamics, the interplay between different sectors and, and the factors that are driving demand in, in specific locations.

So, for someone looking to, to invest in commercial real estate, a, a deep understanding of the market and a willingness to adapt to these emerging trends are, are pretty crucial it sounds like. It seems like working with, with experienced professionals who can provide guidance and insights would be, would be invaluable in, in this, in this kind of evolving landscape.

Absolutely. Navigating the complexities of, of the commercial real estate market. requires, you know, expertise, requires market knowledge, a network of trusted professionals. That’s, that’s where, you know, Eureka Business Group comes in as, as your retail specialists in the, in the DFW market, we, we offer, you know, a wealth of experience and knowledge to guide you through, you know, every step of the investment process.

That’s right. Our team at Eureka Business Group is dedicated to helping you, you know, find the right opportunities, navigate the complexities of the market, and, and achieve your investment goals. Whether you’re interested in, in retail, industrial, office, or, or mixed use developments, we, we have the expertise and, and the resources to, to support you.

You know, this, this deep dive has provided a, a, A comprehensive overview, I think, of the current state of the, of the commercial real estate market, both nationally and here in DFW. But but as you consider your, your investment strategies, we encourage you to think beyond traditional categories and explore the exciting opportunities that are emerging at the intersection of these sectors.

You know, the future of real estate is about connectivity. It’s about adaptability. And creating spaces that, that foster a sense of community and, and enhance the, the human experience. So if, if you’re looking for, you know, expert guidance and tailored solutions for, for your real estate needs in, in the DFW market, don’t hesitate to, to reach out to us at Eureka Business Group.

We’re here to help you navigate this, you know, exciting and dynamic industry and, and make informed decisions that, that align with your, you know, investment goals. Thank you for joining us for this deep dive into the world of commercial real estate. We look forward to connecting with you and helping you unlock the potential of the DFW market.

 Welcome back to our deep dive into commercial real estate. We’re going to take a look at the latest news with a focus on the Dallas Fort Worth market, especially for those of you out there interested in the retail sector. We’ve got some fresh insights from CoStar and JLL. Yeah, we’ve got quite a bit to cover today.

Data centers, construction trends. Even a peek into the world of steel mergers. Right. And these reports offer a fascinating snapshot of the market’s direction. You know where things are heading. We’ll break it all down. What it means for your investments. Let’s jump right in with the JLO report on data center financing.

Predicts a pretty massive surge. Driven by AI. Exactly. Reaching a huge 170 billion globally by 2025. It’s fascinating. Uh, AI workloads are still a pretty small percentage of the total capacity in data centers. Right. But they have a huge impact on development. It’s kind of like AI demands a lot more powerful data centers, more efficient ones, too.

So that pushes development into new markets, really stretching the limits of the current tech. And the report specifically mentions DFW, saying it’s pretty tapped out on data center space, for the next couple of years at least. Yeah, limited availability definitely has some interesting implications for investors, especially local ones.

For sure. So when supply is tight, demand is high. Exactly. That can lead to some higher rental rates and property values. So for those who already own data centers based in DFW, this could be good news. Yeah, I’d say so. The report also mentions a comeback for nuclear power. Interesting. As a sustainable energy source for data centers, looks like those tech companies are serious about their commitment to net zero emissions.

Yeah, there were a good amount of notable nuclear deals in 2024. Seems to be a potential shift in how we power data centers, something to keep an eye on. Could really change the landscape of energy consumption for the entire tech industry. Alright, let’s switch gears a little bit. To the DFW market as a whole, CoStar is reporting a construction slowdown across all the major property types in the area.

Yeah, and that slowdown, you know, it might seem like bad news, but it could actually be an opportunity for the right investor. Okay, I see where you’re going with this. Less construction means Tighter supply eventually, right? Exactly. Which could drive up those rental rates and property value. This is especially important for anyone thinking about the retail sector.

Absolutely. Because despite a national slowdown in retail construction, Dallas is still strong. It’s still a top market for new retail construction starts. Exactly. The DFW retail sector is proving to be resilient. It’s a testament to the region’s strong fundamentals. Population growth, diversified economy, and a business friendly environment.

That’s attracting retailers. And shoppers, of course. Alright, let’s move on to the industrial sector. CoStar data shows a notable change in who’s buying. Private capital is overtaking institutional investors in the industrial market. There are a few factors at play here. Private capital is becoming increasingly available.

These investors are looking for higher yields, they’re perhaps a little bit more comfortable with risk than institutional investors. The shifts suggest that the industrial sector is viewed as having strong potential for attractive returns. So even though we are seeing a slowdown in construction overall, there’s still a lot of activity happening in specific sectors like industrial and retail.

For sure. It’s a dynamic market, requires a keen understanding of the trends if you want to make smart decisions. You always have to keep an eye on those national trends, too. For example, office occupancy rates are still struggling nationwide. Yeah. Major cities, like Los Angeles, are showing a lot of vacancies.

Right. And then there’s this new law in California protecting commercial tenants. Right, lots of changes. Expanding those notice requirements for rent increases, limiting how much landlords can pass through in operating expenses, even mandates translations of lease agreements. It makes you wonder if other states might follow suit.

Potentially, it shows how the legal landscape in commercial real estate is constantly changing. You always got to stay informed. Then you’ve got those devastating wildfires in California having a major impact on insurance rates for multifamily properties. Yeah. CoStar reported that the fires cost something like 1.

9 billion in damages to commercial properties. Wow. It just goes to show how important it is to consider those environmental risks when you’re making real estate investments. Definitely. And even though Texas doesn’t have the same wildfire risks as California. Right. We’ve got our own environmental things to consider.

For sure. Always got to factor those into your due diligence. Absolutely. Now let’s zoom back in on DFW. There was a family owned investment firm that just bought a prime retail center in Uptown Dallas. Seems like a positive indicator for the retail sector. Definitely a good sign. Uptown Dallas is a highly sought after area.

This acquisition shows the lasting value of well located, high quality retail space. And the fact that it’s a family office making the purchase. Known for their long term investment approach. Exactly. Suggests that they have faith in the continued strength of Uptown Dallas. For sure. And then on the other side of the spectrum, you have the container store filing for bankruptcy protection.

It’s a good reminder of the challenges faced by brick and mortar retailers. Yeah, highlights the importance of adaptability, you know, the container store was known for their organizational products. But maybe they didn’t evolve quickly enough to keep up with e commerce and those shifting consumer behaviors.

It’s a good lesson for anyone looking at retail investments. Absolutely. It’s not enough to just have a good product anymore. Nope. Gotta stay ahead of the trends and Anticipate the changing needs of your customers. That’s where understanding the local market comes in. Absolutely. Combined with a good awareness of national trends, the DFW retail sector is full of opportunities.

It is dynamic. But you gotta have a strategic approach to navigate all the complexities. And speaking of complexities, the Department of Justice is suing six big landlords. Yeah, I heard about that. Raises questions about the practices of large multifamily owners. Yeah. You know, even though this case isn’t in DFW, it reminds us how important ethical business practices are.

Definitely. And having a good understanding of those fair housing regulations. That’s important across the entire real estate industry. For sure. Now, let’s look at some good news in DFW. Alright, what do you have? There’s been an increase in demand for industrial space. Especially from logistics and e commerce companies.

That makes a lot of sense. DFW’s got that central location, strong infrastructure, business friendly environment. It’s a prime spot for distribution and logistics. And despite the national trend of less retail construction, Dallas Fort Worth is still a leader in new retail development. Driven by a strong economy and population growth.

Right, this continued investment in retail construction in DFW is definitely a sign of confidence in the long term prospects of the sector. Shows you how important it is to understand those local market dynamics. Now shifting gears a bit to some financing news. Harrison Street. An investment management firm out of Chicago, they just raised 600 million for their very first fund dedicated specifically to data center investments.

That’s a significant amount of capital. Just goes to show you how much interest is growing in data centers as a valuable asset class. It’s a trend we’re seeing both nationally and globally. Data centers are more and more seen as essential infrastructure. Absolutely. And there’s growing concern among those apartment developers in Los Angeles about those rising insurance costs.

Half of the wildfires. Right. It’s a big challenge for developers. Especially those focusing on affordable housing. Those rising insurance costs can really make projects much more difficult. They can make some developments totally unprofitable. It’s a factor you absolutely have to consider when you are evaluating any potential investments.

It’s been a jam packed episode. We’ve covered a lot of ground today. From data centers and retail trends to construction slowdowns and even the impact of wildfires on insurance rates, it just goes to show how much the commercial real estate market is constantly evolving. It’s full of challenges and opportunities.

Staying informed is key. Knowing these national and local trends, that’s crucial for making good investment decisions. And that’s where Eureka Business Group can really help. We specialize in guiding investors through the DFW commercial real estate market, especially in retail. Our focus is on staying ahead of the curve.

We analyze market data, identify the latest trends, understand what our clients need. We are more than just brokers. We’re your trusted advisors, here to help you make informed decisions and reach your investment goals. We’ve thrown a lot of information at you today. It can be a little overwhelming. But don’t worry.

That’s what we are here for. We’re passionate about sharing our expertise and helping our clients succeed in the DFW commercial real estate market. So let’s take a closer look at some of these news items and discuss what they could mean for your investment strategy. For example, we talked about how private capital is outperforming institutional investors in the industrial sector.

What does that mean for you? It’s really about a shift in dynamics. Private capital is getting more aggressive. They’re seeking out opportunities in a market where those institutional investors might be pulling back. This could mean higher yields, potentially, maybe a little bit more willingness to take on some risk.

Interesting. What does this mean for investors in DFW? Well, it shows that the landscape is competitive, especially in that industrial sector. You’ve got to be on your toes to get the best properties. You’ve got to understand those private capital groups, their motivations, their strategies. Alright, let’s dive into this news about the DOJ lawsuit alleging rent fixing.

Even though it’s not in DFW, it must be. It brings up an important point about transparency, ethical practices in this industry. Now, while the case focuses on specific companies, it’s a good reminder for all multifamily owners, even here in Texas. Make sure your operations are fair and compliant. So you’re saying everyone needs to double check their practices.

Exactly. Okay. That family office buying that Uptown Dallas retail center, that’s a pretty interesting story. Yeah. Kind of goes against the whole narrative of the retail apocalypse. Right. It speaks to the fact that there’s still value in well located, high quality retail space, and the fact that it was a family office making that purchase.

It suggests a long term vision for that property. They believe in the uptown Dallas market. Okay, let’s talk about the container store. Filing for bankruptcy, what can retail investors in DFW learn from this situation? Well, the container store struggled, and it really illustrates that retailers need to constantly adapt and innovate.

They were known for organizational products, but they maybe didn’t change fast enough, they didn’t keep up with those shifts to e commerce and consumer preferences. So what about that news on the California wildfires and insurance rates? Does that have any implications for the DFW market? Well, Texas doesn’t have the same wildfire risk as California, but it’s still wise to be mindful of environmental risks.

Insurance costs are rising across the country, and you’ve got to factor that into your plans, make sure you understand the specific risks tied to a property, and get enough insurance coverage. And California’s new law protecting commercial tenants, is that something Texas investors should be paying attention to?

Absolutely. Legislative changes in one state can definitely influence other states. Stay informed on how those tenant landlord laws are evolving across the country, because it could affect regulations here in Texas. Alright, so we’ve covered a lot. What does all this mean for potential investments in the DFW retail sector?

The big takeaway. DFW is still a thriving market. Tons of opportunities, especially in retail. But you’ve got to be diligent. You’ve got to understand the local market, be aware of those national trends, and really assess any potential risks. And that’s where Eureka Business Group can provide some valuable guidance.

We’ve been helping Lions succeed in the DFW commercial real estate market for years. And we specialize in retail. That’s right. Our team stays ahead of the curve. We’re always analyzing that market data, finding the new trends, and understanding our clients specific needs. So if you’re looking to make the most of the opportunities in DFW retail, we’re here to help you.

We can help you navigate all the complexities, maximize your investment potential. So it seems like there’s a lot of uncertainty. But also potential for those who really know what they’re doing. Exactly. That’s what we’re getting at the DFW market, you know, especially retail. It’s always changing. You don’t want to shy away from change.

You want to understand it and use that to your advantage. And that’s where local expertise really comes in. Reading those national reports is one thing, but having people on the ground in DFW makes a difference. Understanding those little nuances of specific neighborhoods and sub markets. Absolutely.

Boots on the ground. That’s where Eureka Business Group comes in. We live and breathe this DFW commercial real estate. We’re right here in it. Tracking all the latest changes, analyzing trends, building relationships. Knowing the local market really can be everything. Especially in a competitive market like DFW.

It’s about connecting those national trends to the opportunities right here. Finding those hidden gems that others might miss. Exactly, and it’s about personalized guidance. You know, understanding what each client wants to achieve. What are their investment goals? And then we tailor our strategies to meet those needs.

DFW retail real estate. What’s the first step they should take? Reach out to us. We love to talk to people. Share what we know. Discuss how we can help them navigate the market. Knowledge is power. And we believe in giving our clients the information they need to make smart decisions. We’ve covered a lot today.

We have. But there’s always more to learn. Commercial real estate, it’s dynamic. It’s exciting. Definitely. Full of challenges and opportunities. And Eureka Business Group is here to help you every step of the way. You know, we’re committed to giving our clients the expertise. The guidance and the support to achieve their investment goals right here in the DFW market.

So as we wrap up this deep dive into the latest news, what’s the one thing you want our listeners to remember? I’d say even with all the uncertainty, all those shifts happening nationally, DFW, especially the retail sector, is resilient. The key is to be smart. Know your risk tolerance. And work with experts who can guide you.

Speaking of expertise, we at Eureka Business Group, we’re passionate about helping our clients succeed in the DFW commercial real estate market, especially in retail. We know the local landscape, and we’re committed to giving personalized service. That’s why we’ve built a reputation for results. We’re not just brokers, we’re advisors, here to work alongside you, to reach your investment goals.

If you’re interested in what we’ve talked about today and you want to explore DFW retail real estate, reach out to Eureka Business Group. We’re here to share our knowledge and help you make informed decisions. Remember, knowledge is power. Stay informed. Stay ahead of those changes. And together, let’s unlock the potential of DFW real estate.

It sounds like you’re saying that even with all these national trends, the DFW retail market is still a good bet for investors. Yeah, it’s not about just investing anywhere, though. You got to be smart about it. Strategic, you know, that’s why we always tell people to find a local expert, someone who really understands DFW.

Someone like Eureka Business Group. Well, we do know the DFW company retail landscape pretty well. We’ve helped a lot of clients find success here. Whether they’re just starting out with their first investment, or if they’re already adding to their portfolio. What’s the biggest misconception you see investors having about retail in DFW?

I think a lot of people are still stuck on that retail apocalypse idea, you know? They see e commerce growing and think that means physical stores are done, but it’s not that simple. So you’re saying physical retail isn’t dead? It’s just changing. Exactly. People still want experiences, you know, they want to touch and feel things, try them out before buying.

And they like the convenience of shopping local. Smart retailers are adapting to all that. Blending the online and offline experiences, creating places that offer something unique and engaging. That makes sense. What advice would you give to someone brand new to commercial real estate, thinking about investing in DFW retail?

First things first, do your research, know the market, what your goals are, how much risk you’re comfortable with. Don’t be afraid to ask questions, get advice from people with experience. And that’s where Eureka Business Group can step in. Exactly. We want to see our clients succeed in DFW commercial real estate.

We offer all sorts of services. Market analysis, finding the right property, due diligence, managing the transaction. We’re there every step of the way, giving you the information and support you need to make the right decisions. So if you’re interested in what we’ve talked about today and ready to take that next step, how can they get in touch with Eureka Business Group?

Our website’s a good place to start. Give us a call or send an email. We’re always up for a chat to see how we can help you reach your commercial real estate goals. Sounds like DFW Retail has a lot to offer for the right investor. Any final thoughts before we wrap things up? Just remember, knowledge is power.

The more you know about the market, the better decisions you’ll make. And don’t be afraid to partner with experts who can guide you. That’s great advice. Thanks to everyone for listening to our deep dive into commercial real estate. We hope you found this informative and insightful. Until next time, happy investing.

 Hey everyone, and welcome back for another deep dive. Today, we’re taking a look at commercial real estate. Ooh, CRE. CRE, exactly. Yeah. With a special focus on the US and. Especially Texas. Yeah, Texas. We’ve got a ton of sources here. Recent news forecasts, industry analyses. The whole shebang. Yeah, the whole shebang to give us a clear view of what’s hot and what’s not.

And what savvy investors should be looking at. Right, exactly. It’s interesting, you know, while some parts of the CRE market are, you know, hitting some bumps. Yeah. We’ll get into that. We will get into that. But Texas is really standing out. It’s true. It’s like a magnet for growth. It really is. The numbers are mind blowing, honestly.

Yeah. Texas added 562, 000 new residents. Wow. Just between July 23 and July 24. Just one year. It’s the fastest growing state in the U. S. Incredible. I know. It’s not just people moving from other states though, right? No, it’s not just moving vans. Yeah. It’s, uh, there’s strong natural population growth, too.

What does that mean? More births than deaths. So you combine that with folks relocating from other states. Especially those expensive coastal areas. Exactly. You’ve got this built in long term demand for real estate of all types. Yeah. You need places to live, places to work. Places to shop. Places to shop, exactly.

Oh, that’s obvious, but it seems like a recipe for CRE success. Yeah. What does this actually look like on the ground? So what are the specific sectors that are really being impacted by this? Well, the multifamily sector is a really good example. Okay. Then on a construction tear. Just trying to keep up.

Trying to keep up, accommodate all these new Texans. Makes sense. And forecasts suggest that things might cool down a bit in 2025, but that doesn’t mean demand is going away. Okay, that’s good to know. Yeah. But, um, one article mentioned something called first generation retail space. Oh! Hopping up in Texas.

Yeah. What is that? That’s a really interesting trend. So basically it means brand new retail spaces. Like, never occupied before. Never occupied before. Built in these high growth areas. Okay. And because Texas is seeing so much growth, these first generation retail spaces are Very in demand. Very in demand.

Makes sense. Yeah. They can’t have all these new people without new places for them to shop. Right. How does this play into the bigger picture for investors and businesses in Texas? So it creates this really unique opportunity, like a fresh start, you know, a chance to shape the retail landscape in a booming market.

That’s exciting. Yeah. And because demand is so high, investors are seeing this as a way to potentially get ahead of the curve. Interesting. To capitalize on Texas’s growth. So while other markets might be tapping the brakes. Right. Texas seems to be hitting the brakes. The gas pedal. Yeah. And I read a quote from the CEO of Jamestown.

Yeah. Jamestown, which is a big real estate investment firm. And he basically said that they see the sunbelt as a whole, like from the Carolinas to Texas. Yeah. All the way to Texas as a safe bet for long term CRE investment because of those demographics and growth. That’s a pretty strong statement. It’s a really strong endorsement.

Yeah. It really emphasizes How Texas’s growth is attracting serious attention from people with money, right? It’s not just hype It’s backed by real investment dollars. It’s real. Yeah, and you know, it’s spilling over into those fun quirky cultural aspects Yeah, you know those bumper stickers. I wasn’t born in Texas.

Oh, yeah the classic I got here as fast as I could Exactly. I wonder if they have one for, I’m building first generation retail space as fast as I can. That’s a good one. But in all seriousness, it really does capture that sense of momentum and opportunity that’s driving Texas right now. Absolutely. So Texas is booming.

We’ve established that. For sure. But even within a boom, there can be, you know, variations. I noticed an article talking about a slowdown in multifamily construction. Interesting. And some of the big Texas cities, Austin, Dallas, Fort Worth, Houston. What’s going on there? Is the Texas magic fading? Not necessarily.

It’s more of a rebalancing. Okay. I think, you know, those rising interest rates, construction costs, tighter lending are definitely impacting the pace of development. Makes sense. But that underlying demand is still incredibly strong. Because of the population because of the population growth. Exactly. Okay.

And Freddie Mac is even projecting that multifamily originations will actually increase in 2025. So it’s not that people aren’t interested in Texas multifamily. It’s just that the market’s kind of adjusting. Adjusting to the new realities. Yeah. Yeah. So maybe a little less pedal to the metal and a bit more like steady cruising.

Exactly. Yeah. Investors are playing the long game here. They’re in it for the long haul. Yeah, they see potential for really solid returns down the road even with these short term adjustments. So if multifamily is adjusting. Right. What about all that shiny new first generation retail space? So what’s the reality on the ground there?

Well, the data tells an interesting story. Okay, so Co star the real estate data experts gurus the gurus Yes, they say that Texas is actually leading the entire u. s. In newly built available retail space Wow, which is pretty remarkable that is impressive and Houston is the star performer within Texas Houston All right, go Houston.

This just shows that developers are incredibly bullish on the Texas retail market. Wow. High demand can create some, you know, unique challenges as well. Absolutely. And even major players like McDonald’s are feeling the squeeze. Really? I came across this quote from their senior VP of development. Oh, yeah.

Her name is Tabassum Zalatrawala, and she was talking about how hard it is to find prime retail space for new stores. Oh, wow. They’re having to get creative, explore different location strategies to adapt to this limited supply. It really shows that even in a booming market like Texas, securing the right location is still so important.

Yeah, it’s not just about building it. It’s about building it in the right spot. That’s exactly right. And that’s why understanding those nuances. Of each market. Of each market within Texas is so important. So it’s not one size fits all. No, it’s not. Okay, so we’ve talked multifamily and retail in Texas.

Right. But what about those other CRE sectors? Where are the investors looking next? Well, one area that’s attracting a lot of buzz is data centers. Data centers. The demand for data storage is just skyrocketing. Makes sense. Thanks to the rise of AI cloud computing. And of course, our insatiable appetite for streaming everything, everything, all the time, all the time, data centers in Texas.

Now, that’s an interesting connection. I hadn’t made. Yeah. Tell me more. I will. Well, it’s really a combination of factors. First, you have that massive surge in demand for data storage and processing we talked about. Right. But Texas also offers this attractive package, you know, a business friendly environment.

Right. Relatively low energy costs and lots of land. It’s like the perfect storm. It’s like a data center developers dream. Yeah. And on top of that, the federal government’s getting involved too. Yeah. President Biden signed this executive order making federal sites available for data center development.

Oh, wow. So it’s getting support from all angles. Interesting. So it’s not just Texas being Texas. There’s like a national push behind this too. Exactly. And you can see that play out in some of the major projects in the state. Like what? So Lincoln Property is developing this billion dollar data center campus south of downtown Dallas.

Wow, a billion dollars. Yeah. That’s a lot of money. Partnered with Gigabit Fiber and Tradition Holdings, that’s a serious investment. They’re not messing around. No, they’re not. Are there other big players making moves in Texas? Oh yeah, absolutely. Provident Data Centers is another one. Okay. They’re building a hyperscale data center campus.

Wow. In Grand Prairie, Texas. I’ve heard of that. With their partner, Powerhouse Data Centers, and these projects are massive. Yeah. Not just in terms of money, but also in terms of their physical footprint. It’s interesting. These data centers are huge. Yeah, they’re like these giant buildings. Yeah. Full of servers and stuff.

Yeah, it’s a different beast than like A shopping mall or an office building. Right. It feels like a real shift. It’s an evolution. In the CRE landscape. Yeah, for sure. And while those traditional sectors are graveling with some headwinds. Yeah. We’ll get into that in a bit. Yeah. Data centers in industrial spaces are showing a ton of momentum.

Yeah, and speaking of industrial. Okay, let’s talk about that. That’s another area where Texas, particularly Dallas, is making waves. Okay. So Dallas and Phoenix are actually leading the nation in industrial building completions in 2024. Those giant warehouses we see popping up by the highway. Yes, exactly.

That’s the industrial boom. That’s it, and it’s not just about storing stuff anymore. Oh, really? No. These facilities are increasingly hubs for advanced manufacturing driven by this push for reshoring. What’s reshoring? So, it’s about bringing manufacturing back to the U. S. Oh! You know, it’s tied to those economic and demographic tailwinds that we talked about.

Okay. People moving in businesses, expanding all those goods, needing a place to be made and stored. So, it’s like this whole ecosystem developing in Texas. TikTok. TikTok. TikTok. From the people, it’s all at the top. From the businesses to the buildings. Yeah, and that 1. 2 million square foot distribution building.

Oh, wow. That was recently finished in Bulch Springs, Texas. That’s a prime example. That’s huge. Massive. Okay, so we’ve painted this picture of Texas as this CRE hotspot. Population growth, multi family retail data centers. Industrial development? It’s a lot. It’s a lot to take in. It is. But like any market, there’s got to be another side to this story.

Right. What are some of the challenges that are maybe lurking beneath the surface? Yeah, you’re right. It’s not all sunshine and roses. Yeah. The CRE sector is facing some serious headwinds. And at the top of the list, I would say, is the impact of those rising interest rates. You know, REITs, Real Estate Investment Trusts, they’re feeling the pressure and it’s just becoming more expensive for buyers to finance deals.

So it’s making everyone a little more cautious. Yeah, those interest rate hikes can really throw a wrench in the works. It can. And it’s not just interest rates that are causing concern, right? No, definitely not. What else? Inflation is another big worry. Yeah, CEOs are talking about the potential for increased inflation, which could lead to higher production costs and make development projects more expensive.

Right. It’s this ripple effect that can impact the whole industry. It’s like this delicate balancing act. Yeah. Trying to keep those projects profitable with all these outside factors. It really is. Yeah. And then you add on this layer of global uncertainty. Oh, yeah. The world is kind of crazy right now.

It’s a little unpredictable. Some CEOs have even mentioned trade tensions and geopolitical risks as major concerns. That makes sense. It’s hard to predict how those will play out. Yeah. So it makes investors hesitant, right? And we can’t forget about labor shortages and rising labor costs that are affecting the entire construction industry.

It’s true. Finding skilled workers is getting tougher and more expensive, which adds another layer of complexity. Yeah. It sounds like navigating the CRE market right now requires some serious foresight and adaptability. It does. But amidst all these challenges, surely there are some opportunities emerging as well.

Yeah, absolutely. Okay, good. It’s not all doom and gloom. Phew. There are some interesting glimmers of hope. Like what? So, for example, we saw public REIT fundraising actually rebound in 2024. Oh, that’s good. Which is a signal that investors aren’t completely shying away from CRE. Okay. They’re being more selective, but they still see the potential for growth.

So maybe a bit more cautious optimism than outright exuberance. I think that’s a good way to put it. Okay. And banks are starting to feel a little bit more optimistic about lending. Good. Especially as those commercial property loan portfolios are improving. Okay. So the financing tap is maybe opening up a little bit.

Maybe a little bit. That’s encouraging. So if investors are still interested. Right. Great. And financing is becoming a little bit more accessible. Where are they focusing their attention? What are those bright spots in the CRE landscape? Well, we’ve already talked about the strength of data centers and industrial spaces.

Right. They’re doing their own thing. They seem to be doing well. Yeah. Those sectors are expected to remain strong, even with those broader economic uncertainties. But what about retail? That sector always seems to be facing an uphill battle. Yeah, it does. Is there any hope for those struggling malls and shopping centers?

I think so. Okay. It’s all about adaptation. Okay. There are these really interesting opportunities for what they call adaptive reuse. Okay. Repurposing existing retail spaces. So like turning those empty storefronts into something completely different. Exactly. Wow. And we’re seeing creative examples of this popping up everywhere.

Like what? Macy’s, for example, is shifting its strategy. Right. By focusing on these smaller format stores. Okay. And expanding its off price backstage concept. Interesting. It’s a way to stay relevant. To adapt. In a changing retail landscape. It’s not just about building new. Right. It’s about reimagining what’s already there.

Exactly. And that kind of outside the box thinking is becoming increasingly important in the CRE world. I can see that. You gotta be adaptable and willing to embrace change. Yeah. But even with those opportunities. Mm. There are still risks involved. Of course, what are some of the specific risks investors should be aware of in this environment?

Well, one example that highlights those challenges is the case of Jamison Properties. Okay. They’re facing some scrutiny over a loan on a Los Angeles office tower. Oh. And it’s causing these ripples in the CMBS market. That stands for Commercial Mortgage Backed Securities. Oh, okay. It’s a complex financial instrument, but basically it shows how one shaky loan can have this ripple effect throughout the market.

So even if things are looking up in some areas. Right. Yeah. There are still those potential pitfalls that investors need to watch out for. Yeah, it underscores the importance of thorough due diligence and careful risk assessment. Don’t just jump into any deal. Exactly. You got to understand the potential downsides.

Yes. Okay, so we’ve covered a lot of ground here, the highs and the lows. We have. For the CRE market. Yeah. What are some of the key takeaways? What do listeners really need to understand about the state of CRE today? I think the big picture is that the CRE sector is at this crossroads. Okay. There are some big challenges interest rates Right.

But there are also some really exciting opportunities emerging. That’s good. Yeah. Texas remains this hot spot. With multi family industrial and data centers showing strong momentum. Okay. But investors need to be aware of those challenges. Be smart. And approach the market with a healthy dose of caution.

So it’s a time for careful consideration. Yeah. And strategic decision making. Absolutely. A lot to digest for sure. It is. But understanding these trends and challenges is crucial. It is. For anyone involved in CRE or even just interested in the forces shaping our communities. Right. And our economy. It’s about more than just buildings and deals.

It’s the bigger picture. Exactly. Awesome. Well, I think it’s time for that thought provoking question that you mentioned earlier. Something to leave our listeners pondering as we wrap up this deep dive into commercial real estate. Okay. What’s the big question we should all be asking ourselves? So, given all these evolving economic and geopolitical factors, the question that comes to mind is this.

Okay. What strategies can CRE investors and developers adopt to navigate both the challenges and the opportunities? Yeah, it’s like we’re standing at a crossroads trying to figure out which path to take. Exactly. And there’s no single right answer, no magic formula. Right. It’s about being adaptable. Okay.

Strategic and maybe even a little bold. Right. So what did that actually look like in practice? Well, one approach that’s becoming more and more common is diversification. Instead of putting all their eggs in one basket, yeah, investors are spreading their bets across different asset classes, geographic markets, and even strategies.

So don’t just bet on Texas, bet on the whole Sunbelt. That’s the idea. Recognize that different markets will perform differently at different times. Okay. And within those markets, different sectors will have their own unique dynamics. So diversification is key. It’s a big one. What else? Another important strategy is focusing on what they call value add opportunities.

Value add. Yeah. So taking those existing properties that might be underperforming or outdated and finding ways to improve them. Like renovations and upgrades. Exactly. Renovations, upgrades, repositioning. Interesting. It’s about finding those hidden gems and unlocking their potential. So it’s like taking something old and making it new again.

That’s a great way to put it. Breathing new life into these underutilized spaces. Exactly. And this can be especially relevant In retail. In the retail sector, yeah. Where we’re seeing so much change. Makes sense. Adaptive reuse is all about transforming those spaces to meet the needs of today’s consumers.

Okay, so we’re talking about challenges, we’re talking about strategies, but I’m also curious about Yeah. Where are those potential bright spots that investors should have their eye on? Well, one area that’s really interesting is the rise of what they’re calling niche sectors. Niche sectors. Okay. Things like senior housing, student housing, self storage facilities.

Interesting. These sectors are often driven by demographic trends. And cater to very specific needs that aren’t as impacted by those broader economic swings. They offer a little bit more stability and predictability in uncertain times. So it’s like finding those pockets of resilience. Exactly. Within the market.

Yeah, it’s about recognizing. That there are always opportunities out there. That’s good. Even when the overall market is facing some headwinds, it just requires a little bit more digging. And creativity. And a willingness to think differently. Well, I think we’ve given our listeners a lot to think about today.

I hope so. It’s clear that the CRE landscape is constantly evolving. It is. Navigating it successfully requires knowledge, adaptability, and a bit of strategic vision. Absolutely. And I think The key takeaway here is that understanding the forces that are shaping the CRE market, those economic trends, demographic shifts, technological advancements, that’s crucial for making informed decisions.

It is. Whether you’re an investor, a developer, or just someone interested in the world around us. Right. These trends matter. They do. Awesome. Well, that’s a great point to end on. So, to our listeners out there, we encourage you to keep exploring, keep asking questions, keep learning. Yeah. About this crazy world of commercial real estate.

Absolutely. There’s always something new to discover, a new opportunity waiting to be unlocked. So true. The future of CRE is full of surprises. Full of possibilities for those who are ready to embrace the challenge of that. Well said. Thank you so much for joining us on this deep dive. Yeah, this was fun into commercial real estate.

Thanks for having me. Of course, we’ll be back soon with another deep dive into a new topic. So stay tuned. Sounds good.