Texas Retail Looking to Rebound
Texas retail owners and brokers generally expect deal activity to rebound in 2025 after a sluggish 2024. One positive sign is that the Mortgage Bankers Association reported an 82 percent year-over-year increase in commercial loan originations for retail assets in the third quarter of 2024.
According to CBRE, the national retail vacancy rate is 4.7 percent, and about 4.3 million square feet of new retail space was completed in the third quarter. Those completions represented a 49 percent decrease from the preceding period, representing the lowest quarterly volume in more than a decade. However, average retail rents are growing nationally by an average of 2.5 percent, while the average asking rent across all U.S. markets now stands at $24.36 per square foot.
The Big Three Get Bigger
America’s three largest retailers (by revenue) — Costco, Walmart and Amazon — accounted for 17% of U.S. retail sales for the first three quarters of 2024, according to the Wall Street Journal. For the 10-year period from 2014 to 2024, they represented about 57% of U.S. retail sales growth.
Retailers Looking to Expand
According to Northmarq, quick service restaurant chains Jack in The Box and Slim Chickens, as well as convenience store chains Sheetz and Wawa, are “targeting massive growth” in 2025. This is in addition to discount retailers such as Five Below and Ross Dress for Less, and big-box retailers such as Lowe’s and Walmart, who have previously announced substantial growth plans.
Albertsons Still Chasing Costco and Walmart Market Share
Despite the failure of its $24.6 billion merger with Kroger, Albertsons still plans to chase market share of two of the three largest retailers Walmart and Costco’s market share. According to ICSC, Albertsons, which also operates the Safeway, Vons, Randalls and United Supermarkets brands, plans to open new stores and close underperforming ones.
