The 28.4-million-square-foot Fort Worth community-neighborhood shopping center market is starting to recover. With no new supply and 91,000 square feet of net absorption, the second quarter saw the vacancy rate fall 40 basis points to 13.3%. In July two neighborhood centers, the 121,000-square-foot The Shops at Timberland Crossing and the 18,600-square-foot Tower of Grapevine, completed construction. But strong net absorption kept the vacancy rate at 13.3%. Rents have edged up thus far in 2012 after falling the prior three years. During the second quarter both the average asking rent and the average effective rent edged up a penny, to $14.27 psf and $12.32 psf. The July increases were 0.1% asking and 0.2% effective.
The July completions left a limited number of community-neighborhood shopping center space under construction, as most retail development here is of the big-box variety of in mixed-use projects. The 235,000-square-foot Parkwood Plaza community center, however, is expected to complete construction in December. Reis nonetheless predicts the vacancy rate will fall to 13.0% by the end of 2012. After that point new supply will pick up and approximately match net absorption, as the vacancy rate falls toward 12.0%. Reis anticipates annual rent gains at around half a percent in 2012 and are forecast to remain moderate thereafter.
The power center vacancy rate is 7.8% for the second quarter of 2012, up 30 basis points from the prior quarter, but down 190 from a year earlier. The average asking rent for power centers is $19.96 psf, down slightly for the quarter and up slightly year-over-year. The 500,000-square-foot Renaissance Square power center started construction in Southwest Fort Worth in April, and is expected to complete construction in early 2014. Another major project is the 485,000-square-foot Grand Prairie Outlet Center in Grand Prairie, which completed construction in August. The 1.5-million-square-foot The Trails Town Center regional center is due to start construction this December.