I was looking at the financial headlines this morning with my coffee and I have to be honest, I felt like I needed a flow chart just to figure out what is actually happening in the economy right now. It is a messy start to 2026, isn’t it? The signals are just all over the place. Messy is putting it lightly.

Look at this on one screen I’m reading that the retail apocalypse is officially dead, right? We just hit a trillion dollars in holiday spending. People are buying things like there’s no tomorrow. But then you look at the other screen and it’s a bloodbath. Household names are shuttering hundreds and hundreds of stores.

It feels like we’re living in two different timelines at the same time. Exactly, and usually when you see that kind of contradiction, record spending at the exact same time as record closures, it means the headline numbers are hiding something massive. For sure. So that’s what I wanna do today. I wanna separate the noise from the actual signal.

We are looking at the state of commercial real estate in early 2026, and specifically we need to look at why the average creates such a false picture. Because if you’re a retailer in a dying mall in the Midwest, this is a recession. No question, but if you’re a landlord in Dallas-Fort Worth, it feels like the boom times are just getting started.

That is the focus we’re gonna unpack the resilience of retail, the absolute juggernaut that is the Texas economy, but people are calling y’all street. And then we have to take a hard look at the macro picture. We do. We need to talk about interest rates and this this maturity wall that everyone is whispering about.

It is a lot to cover, and it’s worth noting right up front that this deep dive is powered by the team at Eureka Business Group, right? They’re the authority on the ground for commercial real estate and DFW and frankly, with how confusing this market is with that split recovery we just mentioned. Having a guide like Eureka who really specializes in retail is well, it’s critical.

You need someone who knows the street corners, not just the spreadsheets. That’s it. Exactly. So let’s get into those spreadsheets first. I mentioned the trillion dollars You did. Walk me through this because inflation is still a thing. Is that trillion dollar number, is it real growth or is it just that a carton of eggs costs more now?

It’s a bit of both, but there is real volume there. For the first time ever, US holiday sales for that November December period passed the $1 trillion mark a trillion dollars. According to the National Retail Federation and CoStar, data sales grew about 4.1% year over year. Okay? 4.1% is decent, but again, if inflation is hovering near 3%, that’s barely breaking even in real terms, that’s true.

But look at what they bought. The biggest winner was clothing and accessories, which saw gains topping 6%. Oh, that’s interesting. It tells us something about consumer psychology. People aren’t just buying milk and eggs, they’re refreshing their wardrobes. They’re preparing to be out in the world. So the consumer is active, they’re active, but they’re extremely picky, and that is where the whole retail paradox comes in.

Okay. So if people are buying clothes, again, going back to the office, how do you explain the other side of the ledger? We’ve got GameStop closing nearly 470 stores. We have Macy’s closing another one 50 if the consumer is so confident. Why are these legacy brands collapsing? This is the classic K shaped recovery, playing out in real time.

The middle is just disappearing. Okay? If you look at the winners, it’s extremely telling. On one end, you have the deep value players. Ollie’s Bargain Outlet saw traffic jump almost 21%. Wow, 21%. Ross dress for less is up almost 10%, so people are hunting for deals aggressively. Consumer has money, but they feel squeezed by, three years of inflation.

So they’re trading down for goods, but, and this is the fascinating part, they’re not trading down on experience. Which brings us to the headline in the stack that I actually thought was a typo. TGI, Friday, PDI, Fridays. Didn’t they just file for chapter 11 bankruptcy And now I’m seeing they wanna open, what was it?

600 new restaurants, 600 by 2030, who is lending them money? That sounds completely insane on the surface. It does. Until you look at where they’re opening. This isn’t about putting another Fridays in a suburban strip mall in Ohio where the brand is, tired. This is a global play. A global play. Why?

’cause in many international markets, the brand still carries this sort of Americana prestige that has faded here at home. It’s a brand reset, it’s a brand reset, and frankly, it’s a bet that dining out is still something people fundamentally crave. Even if they can order. Uber Eats, humans are social animals.

We wanna go somewhere. So they’re exporting the brand to places where it’s still considered cool. That is a bold strategy. It is. But speaking of international strategy, there’s another entrant to the US market that highlights this shift perfectly. Viver, I know them. That’s the website where I buy cheap tools and like kitchen equipment.

I didn’t know they had stores. They didn’t. Until now, they’re a Chinese home improvement brand that has been purely e-commerce. Okay. But they just opened their first ever US brick and mortar store. And the location they chose tells you everything you need to know about the current real estate map.

Let me guess. Not New York. Not New York, not Los Angeles. They chose Houston, Texas, a 32,000 square foot flagship. Why Houston? It’s a strategic master stroke. First, Houston is a port city, so the logistics for a Chinese importer are streamlined, but more importantly, it signals where the growth is, right? You don’t launch a massive physical retail experiment in a shrinking market.

You go where the housing starts are, you go where the contractors are, and right now. That is Texas. It signals confidence. It’s not just shipping from a warehouse. They want a showroom. Exactly. And it proves that retail isn’t dead. It’s just changing hands. The old guard, the department stores, they’re molting, and these new digitally native brands are moving in to fill the void.

So if the department stores are molting, does that mean the malls are finally dead? Because dead malls has been a YouTube genre for what, five years now? Contrary to popular belief, the mall isn’t dead. The bad mall is dead. Investors are actually buying malls again. There were 50 mall deals in 2025, which is the third highest total in 20 years.

Who is buying them? Groups like Simon Property Group and listen to this, Simon is boasting 96.4% occupancy. 96% That is higher than some apartment buildings. It’s not about dead malls anymore. It’s about evolution. The Class A malls, the ones that have evolved into mixed use destinations, they’re thriving, they’re replacing the dead Sears with gyms, entertainment, and better dining.

Okay, let’s go back to that Ville store in Houston, because that brings us to our second big bucket, the Texas juggernaut for the second year in a row, Dallas-Fort Worth has been named the number one real estate market to watch. It has. I feel like we hear this every year. Texas is growing. But is it just because land is cheap or is something else happening?

It used to be because land was cheap. Yeah, that’s changing. The biggest driver right now is what the industry is calling y’all street. Y’all Street. I love that it’s catchy, but it represents a massive structural shift in the US economy. The financial migration to DFW is accelerating. You have the Texas Stock Exchange set to launch in 2026.

You have Goldman Sachs, Wells Fargo, and Morgan Stanley all looking for or building massive spaces in uptown and the legacy area. So this isn’t just about companies moving their headquarters for a tax break. This is the financial infrastructure of the country moving south precisely. And that brings high income earners, but there is another piece of data.

That explains why retail specifically is doing so well in Texas compared to, say, New York or San Francisco and what’s that? Office attendance. Ah, the return to office battle. I assume Texas is winning that one. It’s not much of a battle here anymore. Castle Systems data shows that Texas cities are absolutely crushing the national average.

Austin is at 76.6% of pre pandemic attendance. Dallas is at 66.6%. Houston is at 64.2%, and compared to the traditional financial hub, New York is lagging at 60.1%. Chicago is even lower. So let’s unpack why that matters for retail, because I think people disconnect those two things. They are completely connected.

If you’re a retailer or a restaurant owner. Those percentage points are your lifeblood. That’s your lunch crowd. That’s your lunch crowd. That’s your happy hour traffic. That is the person popping into a shop on their way home. Density drives retail. If the office towers in Dallas are two thirds full, that ecosystem works.

If they’re half empty, the ground floor retail stars. That explains why the construction cranes are everywhere. In DFWI was looking at the forecast. DFW has the most retail space under construction in the entire state, and here’s the economics lesson. Usually when you have record supply, when you build that much, rents drop right supply and demand 1 0 1.

But in DFW, the rent growth forecast is 3%. That’s higher than the statewide average of 2.5%. Demand is out piecing the concrete trucks. Let’s talk about some specific deals, because this is where the Eureka connection really makes sense. It’s not just downtown skyscrapers. It’s happening in the suburbs too, right?

Look at the Shivers Farm project in Southlake. Southlake is already a very affluent area. It is, but this is a massive mixed use project that’s gonna bring the area’s first specialty groc. When we say specialty grocer, we’re usually talking about the high-end brands that drive massive foot traffic. A specialty grocer usually keeps property values nice and high in the surrounding neighborhood.

It does. It anchors the asset but it’s not just the prime suburbs. Look at Dunhill Partners. They just acquired two grocery anchored centers, but not in Dallas proper. They bought in Lubbock. Brownwood, that is really out there. Why would a major investor go to Brownwood? Because they’re chasing yield and safety.

These are fully occupied centers with tenants like TJ Maxx and Aldi. They’re betting on steady cash flow in markets that aren’t as volatile. It shows the Texas miracle isn’t just limited to the Dallas City limits. It’s radiating outward. So Texas is booming. Holiday spending is up, malls are adapting. It sounds like a party, but I have to be the skeptic for a second.

We have to talk about the macro picture because there are some storm clouds on the rise and right there are, and the biggest one is affectionately known as the maturity wall. It sounds ominous. How big of a wall are we talking about? $936 billion. Almost a trillion dollars. Again, it’s the theme of the episode.

So $936 billion in commercial real estate loans are maturing in 2026. That’s right. So for the listener who isn’t refreshing Bloomberg terminals all day, can we break down why this is such a specific danger right now? Sure. Think of it this way. Imagine you bought a building five years ago with a teaser rate of say 3%.

Your monthly payment is manageable, you’re happy. Sure. But in commercial real estate, those loans aren’t 30 year fixed mortgages. They’re usually five or 10 year terms. And the term is up, the term is up, the bill is due. You have to go get a new loan to pay off the old one. But now the bank says, great, we can lend to you, but the rate is 6.5%.

Oh, suddenly your monthly payment doubles. Your tenants aren’t paying double the rent. Oh. So math just breaks. The math breaks completely. And traditionally you would just sell the building, but who wants to buy a building that doesn’t make money? That’s the crisis. And to make it worse, the regional banks who usually lend on these deals are terrified.

They’re pulling back. So if the banks are out, who steps in? I saw a note here about private credit and something called CACA is fascinating. It stands for Commercial Property Assessed Clean Energy. That sounds like a government rebate program. Not alone. It started that way. Yeah, but it has morphed into a lifeline.

Here’s how it works. Yeah. Say you need $20 million to finish a hotel like the Rio in Vegas, which just use this to close a massive $176 million deal. Okay? The bank won’t give it to you, so you go to a CPAs lender, they give you the money for energy upgrades, HVAC, windows, that kind of thing, right? But here’s the trick.

You don’t pay it back like a mortgage. You pay it back as a line item on your property tax bill. Wait, so it’s attached to the taxes? Yes, and because taxes get paid before the mortgage in a bankruptcy, the C PACE lender is at the very top of the food chain. They’re super safe, and because of that safety, they’re willing to lend.

When banks aren’t, it’s like hacking the hierarchy of who gets paid. We call it the capital stack. Think of a building’s funding like a lasagna. C Pace manages to squeeze itself right onto the top layer. It’s becoming the only way to get deals done in this high rate environment. That is wild. So we are innovating our way out of the credit crunch, but even if you can get the money, can you actually build anything?

I’m looking at these labor numbers, 350,000 open construction jobs. That is the other headwind. We’re not just short on cash. We’re short on bodies. And it’s not just because people don’t wanna work, it’s because the competition has changed. How so if you’re an electrician in Dallas, are you gonna wire a retail strip mall, or are you gonna go work on that massive new AI data center where the semiconductor plant that pays 40% more?

So the AI boom is actually poaching labor from the retail sector. It is cannibalizing the skill trades, yeah, which drives up the cost of construction. And if it costs more to build. Landlords have to charge higher rents to make a profit. It’s a cycle that keeps inflation sticky, as the Fed likes to say, which brings us full circle to inflation.

I saw it hovering around 2.7%. That’s still above the Fed’s target, isn’t it? It is. The target is 2% and the stubborn part, the sticky part is shelter costs, rents, so the Fed is holding steady. And interestingly, even though they cut short term rates last year, the 10 year treasury yield, which drives mortgage rates.

Has actually risen. So the market is saying, we don’t believe inflation is gone yet. Precisely. The market is betting that high costs are here to stay for a while. Okay, let’s try to synthesize all of this. We’ve covered a lot of ground. We have a trillion dollars in holiday spending, but GameStop is closing.

We have DFW booming as y’all street, but we have a trillion dollar loan wall hitting the market. What’s the so what for our listener? I think there are three main takeaways. First, retail isn’t dying, but it is bifurcating. It’s splitting into value. The Ross and S and premium experience. If you are stuck in the middle, if you’re in the middle selling boring products, in a boring box, you are in trouble.

The middle is the kill zone. Okay, number two, second. Geography matters more than ever. If you own retail in DFW or Texas, generally you are insulated from a lot of these national headwinds. The migration and the return to office culture are providing a safety net that New York or San Francisco just don’t have right now.

And the third, the capital markets are falling, but they’re different. The banks are out. Private credit is in, if you’re an investor. 2026 is gonna be the year of the refinance hustle. It will be the biggest hurdle, but for those with cash, it might be the biggest buying opportunity in a decade. I love that crisis equals opportunity.

Now, before we wrap up, I wanna leave the listener with a thought that struck me while reading about TGI Fridays and Veeva. Let’s hear it. We’re seeing TGI Friday’s expand while GameStop shrinks. Are we seeing a fundamental shift where dining out. Is becoming the new buying stuff for a generation that can buy any physical object on their phone in three seconds is the only reason to leave the house to eat or have an experience.

That’s a profound question, and I’ll add one more to that. As Texas builds its own stock exchange and y’all street becomes a reality, how long until DFW pricing matches the coastal cities it’s replacing? When does the affordability advantage? Just evaporate. Ooh, that is the billion dollar question for the next decade.

That is all we have time for today. A huge thank you to Eureka Business Group for powering this deep dive. If you need to navigate the DFW retail landscape, you know who to call. Until next time, keep watching the trend lines, not just the headlines. Thanks for listening, everyone.