Retail Comes On Strong
Staff Photo By Greg Junek
RETAIL ROW: Some of the many stores in Bergfeld Center await customers late last week. Bergfeld Center, its first buildings opening in 1948, was the first ‘shopping center’ in Tyler, and at 100 percent occupancy it is proving it remains viable.
By GREG JUNEK
Business Editor
Despite reports of retailers taking hits because of the economy, people in Tyler apparently want to spend money.
Business Editor
Despite reports of retailers taking hits because of the economy, people in Tyler apparently want to spend money.
The narrative of the Burns Commercial Properties 2008 Retail Market Survey said the local retail market “showing tremendous strength,” with the average asking rate for lease space increasing by 12.7 percent over last year, to a record $13.14 per square foot. Last year’s rate was $11.66 per square foot.
While reports show that retailers overall are seeing their sales affected by the economy, Taylor Burns, owner/broker of Burns Commercial Properties, said Texas — and the Tyler area in particular — appear to still be doing well.
Burns said he watches sales tax revenues to the city of Tyler, and they continue to be strong.
“Tyler was up pretty strong again, and it seems like it’s been that way every month this year,” he said. “So the evidence we have right now is that (economic slowdown) is not affecting Tyler.”
Burns said he believes the latest round of gasoline price increases will affect some retail activity, it will probably be evidenced more in restaurants.
People can cook at home, but “people are still going to need shoes for the kids and that sort of thing,” he said.
And although a lot of people complain about oil and gas prices, Texas is benefitting by all the oil and gas exploration money that is being spent here, Burns said. Some royalty owners are benefiting from production, and others are finding jobs in the industry.
Burns said oil and gas firms are leasing more office space, and service companies are expanding into more industrial space.
“Obviously when they do that, they are hiring more people,” he said.
This job creation is greatly hidden because these are not companies that are lured to Tyler; they’re already here, just getting larger.
Along with a record lease rate, the retail occupancy rate was 94 percent when the report was prepared, an improvement over last year’s 92.2 percent. The amount of available space has also decreased, from 190,414 last year to 148,000.
Newer centers are quoting lease rates from $17 to $22 per square foot, the report said. Increased land cost and construction has resulted in the higher rates, which are more than double the rates charged in some of the older retail centers.
Nineteen centers, nearly half of the centers surveyed, were at 100 percent occupancy, and 23 of the properties were enjoying levels of 95 percent occupancy or greater. The annual report does not include Broadway Square Mall in its survey.
The report said that even though occupancy levels and lease rates have increased, no announcements have been made for large, multiple-tenant retail centers.
“The tightened credit markets as well as the slowdown in sales many of the national retailers have experienced are a factor in holding up plans for the construction of speculative space,” the report’s narrative said. “The excellent occupancy rates Tyler is experiencing will no doubt cause developers to construct additional retail buildings along the busier corridors within the near future.”
The report said the population and income growth of the greater Tyler market have made the area a retail activity hub.
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