In North Texas, “we’re on a rocket ship.” That’s Jim Kelley’s description in his conversation about retail in the Dallas / Fort Worth commercial real estate market. Jim discussed the retail rocket ship with Rudy Janecka, who is the Director of Retail Services at Champions DFW, in Podcast 44 of the Champions DFW Radio Show. After reading the excerpt of their conversation, listen to the entire conversation in a free download.
Rudy Janecka: The rising star. Yeah, the rocket ship. The current vacancy rate for retail is down to 4.8%. Average asking rates are actually up from the previous quarter levels and from their levels they were a year ago. Current quoted rent rate in the fourth quarter of 2016 for retail was \$18.14 per square foot, compared to \$15.72 in the third quarter of 2016 and \$15.12 at the end of the first quarter of 2016. So a pretty rapid increase, I guess, due to demand. It represents a 15.4 increase in the current quarter, 16.65% above one year ago at the end of 2015. But in doing tenant rep and landlord rep, there’s just a continued demand. There’s competition with the listing brokers. On a lot of the tenant reps and buyer reps that I do, they’ve got multiple offers on purchases. They’ve got offers waiting in line if the previous purchase does not materialize. So it’s fast-paced. As we’ve talked about before, time kills deals. So it’s up to us at Champions to help our clients that we represent, either buyers or sellers.
Jim Kelley: From time to time, when we are engaged in a tenant representation, Ron, it is challenging to find space for some clients. But it becomes very more difficult to negotiate a more favorable rate, because it’s a landlord/owner market…you best have a professional, knowledgeable, skilled commercial broker on your side to help negotiate and navigate through that, and that’s what we do. That’s what Rudy does, I do, the rest of the team does. So if we don’t have a listing that can accommodate a client’s requirement, we then represent them in going and finding them space. It’s very critical, because it’s beyond just finding a space and that’s challenging, as Rudy noted today.
Ron Taylor: But Jim, let me ask you, what about criteria? Because if you’ve got a line of retailers there, yes, the rates, the money of course is critical, obviously. But there’s also criteria of what is a good fit for that retail to be in a particular location?
Jim Kelley: Yeah. I’ll let Rudy jump in here in terms of what landlords are looking for, because we represent some landlords that think they have a retail building for national credits.
Rudy Janecka: other side of that coin is they’ll tend to look for financial strength and brand recognition. Having seven or eight national tenants in your building obviously increases the financial value from either what you’re selling it or your lender’s perspective, and so forth, Ron, in that respect.