SRS Real Estate Partners has appointed Ryan Byrne to lead its retail investments for the south central region, which covers Texas, Arkansas, Oklahoma, and Louisiana. Byrne joins SRS after a decade at Byrne Company.
Retail real estate has faced predictions of decline over the past 20 years but continues to show resilience. The sector rebounded after challenges brought on by the pandemic and has managed recent big-box store closures without major setbacks. In Dallas-Fort Worth, the retail market remains stable with a vacancy rate of 4.8 percent at the end of Q2, unchanged from last year. Average asking rents have increased from $19.78 to $20.28 per square foot in that time frame.
In an interview with The Real Deal, Byrne discussed his new role and addressed perceptions about the future of retail properties.
Byrne said his focus will be “a mix of private, institutional, family office type groups” investing in multi-tenant assets valued around $10 million or more.
While grocery-anchored centers are popular among investors, Byrne explained that other formats remain attractive: “Grocery-anchored is a really attractive space, but we do power centers. We do some of these lifestyle centers, where it could be a $30 million deal, but we’re in a $250,000 average income market with high home values. Some of those deals might not have a main anchor, but it’s going to be high-end shops and high-end restaurants.”
Discussing asset performance during recent economic disruptions—including COVID-19 and rising interest rates—Byrne stated: “We’ve been lucky in the retail space. We had Covid, which caused some problems with some of these shopping centers. We had the Amazon effect that came in. We even had higher interest rates. Retailers weathered the storm on every single one of these.”
He also highlighted enduring consumer habits: “People have realized that retail is not going anywhere. Americans, just by habit, we like to go and shop. We like to go to restaurants. We like to walk in a store. We like to be social and be around people.”
Investor strategies vary widely according to Byrne: “It really can be all of the above… There are some groups that are going to be short-term value-add buyers… And then you’ve got a mix of other buyers that will do a five-to-seven year hold… And there’ll be other groups that are saying…’I’m gonna go hold it, I just want cashflow longterm.'”
Addressing concerns about large vacant spaces left by retailers such as Party City or Tuesday Morning leaving their premises vacant—a trend noted recently across Texas—Byrne remarked: “People used to get scared of the big box space, but everyone’s realizing they’re getting backfilled quickly… It can be reinvented… There’s always new tenants especially in Texas which is one of the strongest markets…”
When asked who is taking over these spaces now—with examples including fitness operators or experiential tenants—Byrne replied: “It all depends on the location… That’s what’s so great and unique about retail: every center has a life of its own.”
On how owners adapt their properties for changing demand patterns he added: “Everyone kind of has their model… but properties that have a lot of daily traffic with restaurants and a little more life to it… tend to do pretty well…”
The stability seen in DFW mirrors broader trends across Texas where retailers continue adapting through creative reuse strategies for vacant boxes (https://therealdeal.com/texas/houston/2023/09/25/spirit-halloween-finds-silver-lining-of-big-box-retail-flops-in-houston/) and growth sectors such as gyms expand into former retail sites (https://therealdeal.com/texas/dallas/2023/07/24/as-retailers-fold-texas-gyms-stretch-their-legs/).
