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November 01 , 2004

Retailers racing to S. Dallas

November 1st, 2004 - Cedar Hill, other cities emerge as new hot spots Sandra Zaragoza Senior Writer Metroplex developers and investors who once might have rushed to the northern suburbs to exploit underserved retail markets are darting now into southern Dallas County. "Retailers' eyes are focused on Cedar Hill the way the world had its eyes focused on Frisco and West Plano 10 years ago," said Terry Syler, vice president of Dallas-based The Retail Connection. "Suburbia is moving south. Homebuilders are continuing to gobble land around DeSoto and Duncanville, and that provides the density of people and higher demographics," he said. A recent rush of retail growth in southern Dallas County -- specifically in the cities of Cedar Hill, Duncanville, DeSoto and Lancaster -- can't be compared yet with the retail explosion in McKinney, Frisco, Plano and other northern cities, experts say. But new housing activity in South Dallas, both for starter and upscale homes, is creating red-hot retail pockets there. DeSoto, with a population of 42,849, is getting a new Super Wal-Mart, for example. Says Layne Ballard, executive director of the DeSoto Economic Development Corp.: "We are at the tip of the bubble, and there is beginning to be a lot of retail activity coming online." Duncanville -- a city of 36,402 that has lost its share of big-box retailers to neighboring southern cities -- recently snapped up The Villages at Duncanville, a mixed-use development with up to 100,000 square feet of retail space. And Lancaster, with a population of 30,000, is aggressively targeting more retail opportunities near a new Home Depot store, which will open there next March. But it's Cedar Hill, with a population of more than 34,400, that has emerged as a retail leader -- partly because of roads like F.M. 1382 and U.S. Highway 67. "Those are main arteries that take population from Red Oak to Duncanville and Midlothian and feed them into Cedar Hill," Syler said. "Highway 67 is the spine that goes up to Interstate 35 and all the way down to Red Oak." Cedar Hill is the second fastest-growing retail construction market in North Texas behind Northeast Tarrant County, having doubled its retail space from 1 million square feet in 2002 to almost 2 million feet last year, according to research by Dallas-based The Weitzman Group. "The trend for Cedar Hill really started with a couple of developers," recalled David Miracle, director of the Cedar Hill Economic Development Corp. "They know the business, the traffic counts and the household incomes. They saw it had the potential to support development. And once the Kohl's and Home Depot located there, it picked up momentum." The city is also doing its part to lure development with infrastructure incentives, Miracle said. "It is a nice partnership. Attracting retail development adds to the sales tax fund and, with the (new) cash, our economic development department has a war chest to attract industrial and office (development) as well," he said. A telling sign Tony Albanese, vice president and director of Cencor Leasing for the Weitzman Group, agrees with Miracle, saying, "Cedar Hill is going to carry the lion's share of the new development." Albanese is handling leasing of Cedar Hill Pointe in Cedar Hill, a Cencor-developed power shopping center at U.S. 67 and Pleasant Run Road that will boast about 90,000 square feet of retail space. One tenant has already been signed: a 30,100-square-foot Best Buy store. The area surrounding Cedar Hill Pointe has additionally drawn a Kohl's, Oshman's, Ultimate Electronics, Bed Bath & Beyond, a SuperTarget center and JCPenney, Albanese said. The big-box presence is a telling sign for Matt Tice, acquisitions coordinator for Inland Real Estate Acquisitions in Dallas -- one of many retail real estate investors taking a strong interest in southern Dallas County. "The big-box anchors have the research and the knowledge, and the smaller box anchors usually follow those guys," Tice said. "Retailers have noticed there are underutilized markets in the south that give them the ability to expand there and capture a good market share." Tice has two existing shopping centers in the southern region under contract -- one in Cedar Hill and one in Mansfield, directly south of Arlington. Both deals are expected to close by December, he said. Syler of The Retail Connection views the current flight of retailers to the southern sector as a second wave, the first having occurred about a decade ago with the early entrance of some big-box retailers. The latest influx is being spurred specifically by retailers who've vacated Southwest Center Mall, formerly Red Bird Mall, in Dallas, he says. "This tranche of retailers has repositioned their stores in off-mall locations," Syler adds. "The story line is they move out (of Southwest Center) and come down to Cedar Hill and are doing very well." Mike Hopkins, CEO of Dallas-based Hopkins Commercial, who's been scouting the southern area for land and redevelopment opportunities, says that "in the last 18 months, prices have gone dramatically high." Albanese of Cencor Leasing concurs. "Land prices that went for $5 a foot two years ago are now well into the double digits," he said. "That is a function of growth and scarcity." And, though things are changing fast, Miracle believes Cedar Hill still has plenty of room for retail development. "There's a lot of potential for boutique and high-end retail, and there is still a tremendous need for big box and infill," he said.
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