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.