3 THINGS ABOUT 4 TEXAS MARKETS

Transcription

1 THREE BIG DRIVERS 3 THINGS ABOUT 4 TEXAS MARKETS GROWTH 150K 100K 50K GROWTH, JOB GROWTH, STRONG ECONOMIES Δ 55,269 Δ 146,000 D-FW Δ 94,417 Δ 47,763 SAN ANTONIO POP 2.2 M 7.2 M 6.9 M 2.5 M Our 4 major-metro retail markets currently report their highest retail occupancy rates in years. This is due in part to stellar population and job growth, healthy economies and, importantly, near-record-low development even in the midst of a healthy retail environment. Here are 3 key things to know about our 4 metro markets. For the full report, visit weitzmangroup.com. 01 GROWTH : Growth added 55,269 new residents in 2017, bringing the metro area to nearly 2.2 million people. Ranks No. 1 in the nation for growth, based on a population increase of 146,000 during 2017, bringing the total population to 7.2 million. : A national leader for growth, based on a population increase of 94,417 new residents in 2017, bringing the population to 6.9 million. : Population now totals 2.5 million, due to a population increase of 47,763 new residents in JOB GROWTH 12 MONTHS ENDING MARCH 2018 : Ranks in the nation s top 10 job markets with 36,800 jobs added. Ranks number 2 in the nation for job growth based on an increase of 101,200 net new jobs added. : Ranks 4th nationally with new job growth of 62,500. : 27,273 jobs added; unemployment rate of 3.5%. WEITZMAN: ST QUARTER 1 3 THINGS TO KNOW ABOUT 4 TEXAS MARKETS

2 03 100% RETAIL GROWTH ALL FOUR RETAIL MARKETS ENJOY STRONG PERFORMANCE, INCLUDING SOME RECORD-HIGH OCCUPANCY RATES. 90% 80% THE MARKETS ALL REPORTED NEAR- RECORD-LOW CONSTRUCTION IN 2017, WHICH BOOSTS OCCUPANCY BY DRIVING EXPANDING CONCEPTS TO EXISTING SPACE IN ESTABLISHED SUBMARKETS. NEW SPACE FOR 2018 SHOULD BE SIMILARLY CONSERVATIVE million-SF retail inventory The Austin area currently reports 96.0% occupancy, making it the strongest market in Texas in terms of occupancy. Austin added only 640,000 square feet in 2017, largely in grocery-anchored and power-anchored retail. For 2018, we expect to see an uptick in new space. DALLAS / FORT WORTH million-SF retail inventory D-FW is at a three-decade high in terms of occupancy and is now at 92.5%, exceeding the previous high point of 92% in D-FW only added 4.2 million square feet in 2017, with new space dominated by grocery- and entertainmentanchored retail, as well as key mixeduse projects with significant retail components. More of the same is on track for % 60% million-SF retail inventory 96.0% 92.5% 95.0% 94.0% DFW SAN ANTONIO INVENTORY 48.8 M M M 45.8 M Houston is at 95.0% retail occupancy, thanks to a diverse economy that has performed well through a hurricane s aftermath and an energy slump. Construction in 2017 added 2.8 million square feet, a decrease over 2016, with new space dominated by grocery- and power-anchored projects along a major new freeway expansion 45.8-million-SF retail inventory San Antonio reports a healthy 94.0% occupancy, a rate that should continue for the rest of 2018 and beyond. New construction added only 360,000 square feet, largely for limited groceryanchored construction. The biggest construction news is set for 2019, when IKEA opens as the anchor for the 900,000-square-foot Live Oak Town Center. IKEA broke ground in the first quarter of RETAIL OCCUPANCY FOR 4 TEXAS CITIES NEW SPACE LEADERS : Nordstrom Rack, Randalls, H-E-B, 365 by Whole Foods, Field & Stream, Dick s Sporting Goods, Costco Neiman Marcus, AMC, IKEA, Walmart, WinCo Foods, REI, Barnes & Noble, Tom Thumb, Costco, Dick s Sporting Goods, Kroger, Sprouts : H-E-B, Kroger, Target, Burlington, Hobby Lobby, Walmart, Dick s Sporting Goods, Lowe s, Academy, Barnes & Noble, Ross, 365 by Whole Foods : H-E-B, Sprouts, La-Z-Boy, The Rustic, IKEA WEITZMAN: ST QUARTER 2 3 THINGS TO KNOW ABOUT 4 TEXAS MARKETS

3 THREE BIG DRIVERS 3 THINGS ABOUT 4 MARKETS GROWTH, JOB GROWTH, STRONG ECONOMIES, DF W, & SHINE IN THE LONE STAR STATE Our 4 major-metro retail markets currently report their highest retail occupancy rates in years. This is due to in part to population and job growth, healthy economies and, importantly, near-recordlow development even in the midst of a healthy retail environment. Here are 3 key things to know about our 4 metro markets. For the full report, visit weitzmangroup.com. 01 GROWTH ( ) : Since 2000, the MSA s population has increased 64.9%, to 2.1 million. Ranks No. 2 in the nation for resident growth, based on a population increase of 39.4% to 7.2 million : Ranks No. 1 in the nation for growth, based on a population increase of 45.5% to 6.8 million. : Now totals 2.4 million, based on a population increase of 42.4% 02 JOB GROWTH : 34,000 jobs added in 2016 Job growth of 3.5% 135,400 jobs added in 2016 Job growth of 4.0% : 9,500 jobs added in 2016 Job growth of 0.3% : 25,600 jobs added in 2016 Job growth of 2.6% WEITZMAN: ST QUARTER 1 3 THINGS TO KNOW ABOUT 4 TEXAS MARKETS

4 03 100% RETAIL GROWTH ALL FOUR RETAIL MARKETS ENJOY STRONG PERFORMANCE, INCLUDING SOME RECORD-HIGH OCCUPANCY RATES. THE MARKETS ALL REPORTED NEAR- RECORD-LOW CONSTRUCTION IN 2016, WHICH BOOSTS OCCUPANCY BY DRIVING EXPANDING CONCEPTS TO EXISTING SPACE IN ESTABLISHED SUBMARKETS. NEW SPACE FOR 2017 WILL BE ON PAR WITH OR SLIGHTLY BELOW THE 2016 LEVEL, WITH GROCERY STORES STILL THE MOST DOMINANT ANCHOR TYPE. 90% 80% 70% 60% 96.0% 92.6% 95.6% 94.0% DFW SAN ANTONIO INVENTORY 48.3 M M M 45.1 M RETAIL OCCUPANCY FOR 4 TEXAS CITIES The Austin area currently reports 96.2 % occupancy, making it the strongest market in Texas in terms of occupancy. Austin added only 1.1 million square feet in 2016, mostly for grocer-anchored and power-anchored retail. A Nordstromanchored mixed-use project accounted for around 60 % of all new space DALLAS / FORT WORTH D-FW has happily broken its 34-year-old record for high occupancy and is now at 92.6 %, exceeding the previous high point of 92 % in D-FW only added 2 million square feet in 2016, a rounding error for a market with 193 million square feet. Much of the new space was for grocery-anchored retail, led by concepts like Kroger, and some mixeduse projects; more of the same is on track for 2017, which should see a slight uptick in new space completions. Houston is at 95.6 % occupied, even in the face of an energy-industry slump, thanks in part to a diverse economy that has remained a job and housing generator. Construction in 2016 added 3.4 million square feet to a market with more than 115 million square feet. Houston saw numerous grocery, power-anchored and mixed-use projects, as well as two major mall expansions. Construction is steady but slowing for San Antonio reports a healthy 94 % occupancy, a rate that should continue for the rest of 2017 and beyond. New construction added only 1.2 million square feet, largely for Walmart stores, H-E-B and a handful of power anchors. The biggest construction news is set for 2019, when IKEA opens as the anchor for the 900,000-square-foot Live Oak Town Center regional-draw project. NEW SPACE LEADERS : Nordstrom, Randalls, H-E-B, 365 by Whole Foods, Field & Stream, Dick s Sporting Goods, Walmart Neighborhood Market Kroger, Belk, Walmart, WinCo, Whole Foods, REI, Barnes & Noble, Neiman Marcus, Tom Thumb, Costco : Kroger, Target, Walmart, Dick s Sporting Goods, Field & Stream, H-E-B, Costco, Academy, Barnes & Noble, Field & Stream : Walmart, H-E-B, Natural Grocers, Macy s Backstage, Academy WEITZMAN: ST QUARTER 2 3 THINGS TO KNOW ABOUT 4 TEXAS MARKETS

5 WEITZMAN CENCOR CORPORATE OFFICE: 3102 MAPLE AVE, STE. 350, DALLAS, TEXAS ST QUARTER 3 THINGS 4 to know about TEXAS MARKETS Texas major-metro retail markets Austin, Dallas-Fort Worth, Houston and San Antonio all share one thing in common: strong job and population growth that is driving some of the best-performing retail markets in the nation. THREE BIG DRIVERS 1 RESIDENTIAL GROWTH 3 RETAIL GROWTH Our Texas markets are national leaders in combined single- and multi-family residential growth. Nationally, D-FW is No. 2, with 57,146 residential permits in 2015; Houston is No. 3, with 56,901; Austin is No. 10, with 22,370; and San Antonio completes the list with 13,970 new residential units. 2 GROWTH Four markets, 400,000 people. That is the total population growth our four major Texas metros reported last year. In fact, according to the Census Bureau, if these four metros formed a state, they would rank second only to Texas among U.S. states! All key Texas retail markets report strong performance. Austin and Houston are the tightest markets in Texas, with Austin at 96.0% occupied and Houston at 95.0%. Austin s rate is based on an inventory of 47.2 million square feet. Houston s inventory, of course, is much larger, with million square feet. San Antonio and Dallas-Fort Worth are nearly as strong with, respectively, 93.5% and 91.6%. D-FW s retail market inventory totals million square feet, and San Antonio s is approximately 41.7 million square feet. The combination of population growth and residential growth, combined with metro area job markets that rank among the strongest in the nation, continues to attract retailers to our markets.

6 Retail concepts like what they see. Austin now ranks as the fastest-growing large city in the country, with annual population growth of 2.9% and a population that has surpassed 2 million for the first time. Houston reports 2.5% population growth, and Dallas/ Fort Worth is not far behind, with 2.1% population growth. San Antonio s metropolitan area reported an equally strong 2.2% population growth, according to a U.S. Census Bureau report on 2015 gains. RETAIL CONSTRUCTION REMAINS IN LINE WITH DEMAND Our major metros are seeing construction remain constrained by historical standards. New space comes online largely occupied, and speculative space is extremely limited. As a result, expanding retailers like H&M and WinCo Foods have been leasing at existing centers, removing some of the last remaining well- located blocks of vacancy from our markets. Austin is seeing the most limited retail space, with only 900,000 square feet in 2015 and a little over 1 million square feet coming online in 2016, largely for grocery-anchored retail, as well as an open-air mall expansion with a Nordstrom. DALLAS-FORT WORTH In Dallas-Fort Worth, new space for 2015 topped 2.7 million square feet, a blip on a 193-million-square-foot inventory, with much of the new space for grocers including Kroger. For 2016, new space will approach or equal the 2015 total, largely in grocery-anchored retail, as well as some mixed-use and power retail. Much more square footage is in the works in community and mixed-use projects such as Legacy West in Plano and The Colony s Grandscape, but it will be phased in as demand dictates. Houston is the most active grocery market, with Kroger widely expanding its 123,000-square-foot Marketplace concept, followed by H-E-B, which is 2.9% 2.1% D/FW 2.5% 2.2% Population Growth of 4 Texas Cities 400,000 New Residents also expanding marketwide. Other active concepts include Sprouts, Whole Foods, Walmart, Costco and Target, among others. Houston also is seeing a number of mixed-use projects, largely specialty retail built in conjunction with apartments. Despite the oil downturn, the retail market remains healthy due to Houston s diverse economy, which is maintaining job and population growth. San Antonio continues to see limited construction, which helps the market maintain strong occupancy numbers. Only 883,000 square feet of new space came online in 2015, led by Walmart and a 260,000-square-foot expansion of the massive center The Rim, with junior anchors and restaurants. Walmart and H-E-B will dominate construction in 2016, although a handful of junior anchors like Rooms to Go also will add new space. NEW CONCEPTS Texas will see its first 365 by Whole Foods stores, in the Austin and Houston metros. Massive 300,000-square-foot sporting goods store Scheel s will open its first Texas location in D-FW next year, and Colorado-based Natural Grocers is under way with its first San Antonio store.