Okay, let’s dive in. If you’ve been anywhere near North Texas recently, you can definitely feel it, can’t you? That kind of buzz, the constant hum of activity. Oh, absolutely. Cranes everywhere. New projects, breaking ground, it seems every week deals getting done. It’s a really dynamic environment.

Seems like the region is just pulling in a lot of capital, a lot of development interest, even while, other places might be seeing things cool off a bit. For sure. And that’s really what we wanna untack today. We’ve gone through a whole stack of recent reports Dallas Business Journal, bno, CoStar Globes, that kind of thing from the last say, 10 days or so.

The goal here is it’s to cut through all the noise, pull out the really important bits of news and insight. We’re focusing especially on what’s happening right here in Dallas-Fort Worth commercial real estate, and we’ll spend a good amount of time on retail today too. There are some really interesting shifts happening there, but also connecting it back to the bigger picture.

Exactly, so get ready. The the climate right now, it feels like this mix of a really big development moving forward, but also some ongoing challenges and definitely some shifting dynamics in how space gets used and funded. I. Yeah, you really need to look past just the headlines to understand what’s driving things.

Dig into the actual deals, the specific trends. Okay, so let’s kick off with just the sheer amount of development and growth across DFW. It’s it’s not just downtown Dallas anymore. Is it? Big mixed use stuff, huge land deals popping up all over. That’s what strikes me too. It’s not just the core, it’s really pushing outwards, often sparked by, big employer moving in or new infrastructure. Perfect example. Sherman up north, that massive new Texas Instruments client is obviously the catalyst and right nearby that $250 million mixed use village. They’re building. Yeah. Tailored for the TI workforce. Exactly. It’s moving fast. Reports, say the infrastructure work, roads, utilities, that stuff should be done by the end of June.

Wow, that is fast. It just shows the kind of demand that a huge anchor like PI creates. It can really accelerate things in what maybe was a quieter area before. Then you go bit south Pilot Point. A really big land deal just closed there. 260 acres. And the reports connected straight to North Texas’.

Growth overall saying it could, really reshape that town with housing and commercial space. It tells you the growth wave is still spreading out. Developers are clearly betting on population boom, reaching further into those caller counties and you can’t talk DFW without mentioning Frisco Ray.

Never that, $350 million mixed use place near the PGA headquarters in the Omni. It’s hitting its final fate. Yeah, definitely benefiting from all the buzz around the PGA campus, the whole $5 billion mile thing they talk about. What’s wild though is even with all that construction, Frisco’s, EDC says something like 13% of the city’s land is still undeveloped.

And a lot of that is apparently earmarked for commercial use. There’s still a lot of runway there for future growth, plenty of potential. Okay, let’s swing down into Dallas itself. Near UNT Dallas, over in the University Hills area. A 65 acre mixed use project. Just got its initial. Okay. From the city.

Ah, interesting. What’s the plan there? Housing, retail, commercial space. The idea is really to bring, a significant investment boost to that part of South Dallas. That’s good to see spreading the investment around, not just concentrating it in the usual spots, trying to lift other areas and closer in the Cedars neighborhood just south of downtown.

It’s seen a real comeback lately. It really has. Lot of interest there. A big piece of land just hit the market there. Given the location and the interest in the Cedars, that could be pretty significant. Maybe another big mixed use or commercial project. Yeah. Large sites like that, right next to the core, they’re getting harder and harder to find, so it’s availability is definitely gonna draw Attention could be impactful.

It’s not all new construction either. We’re seeing companies expanding, taking up space, adding jobs. Denton, for example. The city is looking at incentives for several companies, planning expansions there. Could be over 200 jobs potentially. That’s a positive sign for Denton shows. Businesses are still growing and cities are, willing to step up to keep them or attract them.

And Richardson landed a really big one. At and t they signed a lease for what, 186,000 square feet? Yeah. For a call center expansion. Bringing a thousand jobs with it. That’s one of the. Biggest corporate moves in Richardson lately, according to the reports. That’s particularly interesting, isn’t it? A large physical footprint for a call center.

You hear so much about remote work, but some operations, they still need that big centralized space, and DFW is clearly attracting those. Okay. Shifting gears slightly, let’s talk major redevelopment. Taking older assets and giving them a new life. The Dallas Convention Center Overhaul, that’s a huge one.

Massive multi-billion dollar project. It keeps moving forward. Just secured more funding, more contracts signed. That’s so critical for downtown revamping the convention center. The goal is to really boost that convention and meeting business, which helps hotels, restaurants, retail, everything down there and near Uptown City Place Tower.

Getting a huge makeover. The city council just approved almost $14 million in tax incentives for that. Yeah, a $445 million project, I think to turn that office tower into more of a mixed use hub. Exactly. That’s a great example of adaptive reuse. Taking an older office building, maybe one that’s struggling a bit in the current office climate and re-imagining it, adding other uses to revitalize it and the area around it.

But these giant projects, they’re not always smooth sailing. Look at the Fort Worth stockyards that. A billion dollar redevelopment plan. The partnership between Majestic and Hickman. Yeah. Apparently they’re caught up in a legal dispute now. That highlights the risks, doesn’t it? Even in a super popular historic area, like the Stockyards, big complex projects with multiple partners can hit snags.

Sounds like some construction is still going, but a dispute like that definitely adds uncertainty. Okay. Let’s zoom in now specifically on DFW Retail. Yeah, there’s, there’s a lot happening there beyond just the retail parts of those mixed use projects. We mentioned retail is, yeah, it’s a really interesting story in DFW right now, you’ve got parts that are doing really well, expanding even, and then other parts facing, pretty significant challenges on the positive side.

Barnes and Noble, the bookstore? Yeah. What about them? They’re actually expanding here, opening a new store in a part of DFW where they didn’t have one before, which. Fits their recent national strategy of actually opening stores, not just closing them. That is interesting. It suggests that for certain retailers, maybe ones that offer more of an experience like browsing books, physical stores still make sense, especially in growing areas.

They see an opportunity and cities fighting hard for the big retail anchors. Mansfield down south, they’re offering up to $8 million in incentives to try and lure new Costco. Wow. $8 million. Yeah, for a big 150,000 square foot warehouse club. That just shows you how valuable cities think those big anchors are.

Costco brings tons of traffic jobs, tax dollars, but they can really kickstart development around them. But then on the other side of the coin, you have older formats, really struggling town, east Mall out in Mesquite. Big regional mall. It was scheduled for a foreclosure auction, but got pulled off literally at the last minute.

Oof. That’s usually a sign of distress. Getting pulled means they bought some time. The owners are likely scrambling to work something out with the lender, maybe restructure debt, or figure out how to reposition the mall for, today’s retail world. It’s a reprieve, but the pressure’s clearly on.

Maybe the biggest bet on adapting retail is that whole experiential trend, universal theme parks. They’re still moving forward with that huge $7 billion. Theme park plan for Frisco, right? The one aimed at younger kids. That’s a massive long-term gamble on experience-driven real estate. If it works, it’ll be a total game changer for all the commercial development around it.

A huge new draw for the region. Okay, so let’s pull back a bit. How does all this stuff we’re seeing in DFW, how does it line up with the bigger picture, the national retail and CRE trends? DFW is definitely influenced by what’s happening nationally, for sure. I. And the national picture right now is it’s pretty mixed.

Some good signs, some definite warning signs, like reports from the big ICSC conference in Vegas recently. The big retail real estate convention sounded surprisingly upbeat, didn’t they? Yeah, that was the chatter I. Deal making was apparently pretty strong. Even with all the economic worries floating around, retailers are still looking to expand, apparently even competing for the best spots, which suggests maybe retail real estate is finding its footing again, maybe better than some other sectors, it seems that way.

And related to that, other reports mentioned investors are starting to, cautiously put money back into retail, deploying that dry powder they’ve been sitting on, especially for centers that are well leased and well located nationally. The numbers actually look pretty decent for retail overall.

In many places, vacancy is still relatively low. Rents are holding up or growing, especially for things like neighborhood centers, grocery anchored spots, standalone buildings, right? And landlords seem to be getting creative with backfilling spaces, bringing in grocers, fitness places, medical users, those experiential concepts.

We talked about a more diverse tenant mix. Grocery anchored centers especially seem to be the real bright spot. Consistent traffic makes them feel like a safer bet for investors. Definitely they provide that essential service. So foot traffic holds up pretty well even when consumers pull back elsewhere.

Okay. But now for the the less rosy side, the headwinds, and there’s a big one specific to Texas, let me guess. The Dallas Fed survey Yep. Showed Texas retail sales actually contracted sharply in May. The report said consumers are pulling back on non-essential spending, citing uncertainty, higher costs.

That’s a really important flag for DFW. You can have all the development boom you want, but if consumers in the state aren’t spending that directly impacts retailers on the ground. Something to watch closely. And then there’s the whole tariff situation. Yeah. Trade tensions, new tariffs that could eventually hit consumer’s wallets too.

Potentially dampen spending, even if vacancy is low now. Exactly. It just adds another layer of uncertainty for retailers and for the landlords who depend on their sales. Hard to plan long term. Another Texas specific issue. That potential ban on intoxicating hemp products like Delta eight, right?

The bill moving through the legislature, if that passes reports, say it could shutter something like 8,000 retail outlets across the state, mostly vape shops, CBD stores, places like that. Yeah, that would definitely create a wave of vacancies in those smaller retail spaces. Landlords would suddenly have a lot of, specific types of spaces to fill ripple effects for sure.

And filling space isn’t always easy. We hear about competition for good spots, but some markets like LA apparently are still dealing with a lot of empty big box stores. Needs creative thinking to fill those. It really underscores how much location and local dynamics matter. In retail, you can’t just paint the whole country with one brush.

We’re also seeing specific retailers and even big projects hitting rough patches. The American Dream Mega Mall in New Jersey. Its value reportedly got slashed by $800 million. Ouch. Yeah. Shows the financial strain. Some of those massive debt heavy retail complexes are under. McDonald’s is pulling the plug on most of its cosmic spinoff locations already.

That was fast. Shows how quickly strategies can shift if the initial hype doesn’t translate into sustainable business and closer to home at home group, the home decor retailer based here in Texas. Reports say they might be preparing for chapter 11 bankruptcy. Facing cash issues from tariffs, maybe softer demand.

Yeah, that’s concerning. It just shows that even within retail, which seems resilient overall, specific companies or formats can still be under immense pressure. So given all these moving parts, how are developers, cities, retailers, adapting? I. We’re seeing moves on the policy front and with data, right? Like that new Texas zoning reform bill, the one that could let developers build housing on land that was previously zoned only for commercial uses, like maybe an old shopping center.

Yeah. In certain cities. Dallas and Houston included. I. The idea behind it is, boost Housing Supply, maybe find a new use for underperforming commercial sites. But it also raises questions, right? Does it reduce the land available for future commercial needs? It’s a complex change. And on the data side, retailers seem to be getting much more sophisticated, definitely using analytics, foot traffic data, sales numbers, all that stuff to guide where they open new stores trying to take some of the guesswork out of it, especially when the economy feels uncertain.

Makes sense. Okay. Let’s pivot to the money side of things. Financing, investment. That’s really the fuel for all this CRE activity, absolutely critical. And the picture there is it’s nuanced, some caution, but also some clear areas of activity. Industrial and multifamily seem to be the favorites right now, office and parts of retail.

Maybe facing a tougher climate. Yeah. Reports from the Mortgage Bankers Association, the Fed, they confirm banks have definitely tightened up their lending standards for CRE, especially for office and hotels, citing the uncertainty, falling values. In some cases, we even saw that news about a major German bank pulling back from U-S-C-R-E lending altogether because of the volatility.

So less traditional bank lending available makes things harder for borrowers needing new loans or refinancing for sure. Pressure, but despite that investment volume actually went up in the first quarter, year over year, about 14%. Driven mainly by industrial and multifamily. Like you said, the forecast for the full year suggests growth is possible, but it really depends on conditions.

Staying stable and the capital that is flowing seems very selective. Wow. Going for the best quality assets and definitely favoring growth markets like the Sunbelt, like DFW. Exactly. It’s not like capital has dried up completely, but investors are being much, much more careful and picky than they were a couple of years ago.

They want proven fundamentals. Which opens the door for alternative capital, right? Private equity debt funds, KKR, raising that big $850 million credit fund was mentioned precisely. These non-bank lenders are stepping into the gap left by some of the more cautious traditional banks. They can provide financing for deals that might not fit the bank’s current criteria.

Family offices too, apparently increasing their real estate focus, looking for income from necessity retail or multifamily. But at. Adjusted prices. They’re playing a really important role right now in keeping deals moving. Different risk tolerance, maybe different timelines. Definitely. So what about property values overall?

Are we seeing a bottom? With the Green Street Index, which tracks read owned properties, it was basically flat over the last year after some earlier declines. So stabilization may be, at least for the higher quality stuff that index tracks doesn’t mean everything is fine. Of course, there’s still distress in older, weaker assets.

For sure and the office sector is where you really see that valuation pain still. Yeah. Just look at some recent sales suburban office parks selling for 50% off their previous value in places like the Bay Area, that Houston Tower sale at a big loss, a building in Maryland trading for half its prior price.

Yeah, those headlines really highlight the ongoing struggle in office driven by remote and hybrid work. It stands in pretty stark contrast to the relative stability or even growth we’re seeing in parts of retail, like grocery anchored or well located neighborhood centers. And it’s driving those office tourism conversions we mentioned earlier, like that project at five Times Square and potentially more here in Texas with that new bill trying to find a viable future for those buildings.

It’s adaptation in action, born out of necessity for that sector. Okay. One last piece on the macro level. Yeah. The risk to the financial system from all this CRE stuff. There were some scary headlines, studies pointing to banks at risk. But Fetcher Powell seemed relatively calm about it recently.

Yeah. He basically said the risks seem manageable overall for the banking system, acknowledged its concentrated more in smaller banks, but didn’t sound like he saw a systemic crisis brewing. Some analysts are even predicting bank CRE loan losses might peak later this year in 2025. So the sense is, yes, there will be pain for some lenders and some properties, but hopefully not something that takes down the whole system still.

It’s definitely something regulators are watching very closely. Okay. Wow. That was a lot. Let’s try to bring this all back home. Tie it together for you, the listener, especially if you’re active or interested in the DFW commercial real estate scene. So the DFW picture, big picture, it’s still one of pretty significant growth.

Ambitious development is happening. Large scale projects moving forward. Companies are expanding here. Bringing jobs, bringing people, pushing the boundaries of the metroplex outward and looking just at DFW retail. We see clear pockets of strength. Barnes and Noble, expanding into new areas. Cities like Mansfield competing hard to land at Costco.

Huge bets being placed on experiential retail like the Universal Park and Frisco. Real demand there. But, and this is important, it’s not all smooth sailing. Older formats like maybe townie small, are clearly facing pressure and you have those broader economic factors. The dip we saw in Texas, retail sales, potential tariff impacts down the road.

Those are real headwinds to keep an eye on. Then you look nationally, the CRE market overall is a mixed bag. Financing’s definitely tighter from banks, but alternative capital sources stepping up and retail. Nationally seems to be holding up better than many predicted, especially certain types like grocery anchor plus retailers and landlords are adapting, using experiential concepts using data.

So what does this all mean for you listening? I think it means that even with economic uncertainty swirling around, and even with the obvious problems in other sectors like office, the DFW market still shows real resilience and opportunity, especially in well located retail spaces that have adapted.

It’s fundamentally driven by population growth here and supported by very specific targeted investment in development. Yeah. It’s definitely not a market where you can just throw a dart. You really need to understand the specific sub-markets, the property types, the strategies that are working now Exactly.

Requires focus. Which brings us to maybe a final thought to leave you with something to chew on, given this really unique mix, we’re seeing, strong local growth signals right here in DFW, but happening against a backdrop of national economic headwinds. And you layer on top the way retail itself is evolving new strategies, new formats.

Where are you going with this? Is it possible that this specific moment right now is actually the ideal time to identify those prime DFW retail opportunities? The ones showing that resilience maybe get in before the broader market sentiment fully catches up to how well certain segments are actually performing here.

That’s a provocative question. It’s really about balancing that that ground level optimism in specific deals in some markets here with the, the necessary caution that the bigger economic picture demands, finding that sweet spot. Definitely something to think about as you watch how things unfold.

Thanks for joining us for this deep dive into the latest CRE News.