DFW Retail Occupancy Slips From Record High Due to COVID

DALLAS—Unlike previous downturns such as the Great Recession of 2008-2009, the Dallas-Fort Worth retail real estate market entered the current pandemic-induced downturn from a position of strength. One of retail’s benefits going into the pandemic was its back-to-back years of healthy performance as well as a decade of near-historic low retail construction that kept oversupply to a minimum, according to a mid-year report by Weitzman.

That overall health is combined with programs such as PPP loans and landlords’ willingness to collaborate with tenants on workouts that often include rent deferrals. These programs have helped limit what otherwise could have been a more significant decline in overall retail occupancy. However, the metro area’s retailers, restaurants and retail landlords are now struggling to identify the best methods to deal with the unprecedented challenge posed by COVID-19, which has resulted in increased unemployment, greatly reduced shopper traffic and mandated closings or reduced capacity limits.