Texas leads in retail construction

There's a lot holding back retail construction in this economy. Building and borrowing costs are high, tariffs and immigration policies aren’t helping, and consumers continue to buy a lot of their stuff online.

But there are definitely some bright spots in this sector. Namely, the Lone Star State.

There’s an appetite for retail real estate out there, said Ebere Anokute, U.S. head of retail research at CBRE. But nowhere is building it quite like Texas. 

“Retail tends to follow where the people go,” Anokute said. And people across the country and around the world have been moving to Texas in droves.

Anokute said roughly a quarter of all new retail construction last year in the U.S. happened in Texas. 

“And five of the top seven markets for new retail construction in 2025 were in Texas. So that's Dallas, Houston, Austin, Fort Worth, and San Antonio,” he said.

In Dallas, Bob Young, executive managing director of real estate firm Weitzman, said large new supermarkets have been a major driver of retail construction. 

“We're in a grocer Gold Rush and … why is it? It's so simple. Retail follows rooftops, and in rooftops are multi- and single-family, and they're all fed by commerce, which is job and population growth,” Young said.

The families buying homes in new suburbs and exurbs need somewhere to shop, and people still like buying groceries at a physical store. 

Wade Greene, director of retail services at Colliers in Houston, is seeing growth in what he calls “power centers” — think of large shopping centers.

“You've got a Target, an Academy, you know, Ross, Burlington … in a row, with some kind of smaller shop retail and pads up closer to the road,” Greene said.

Amenities are also playing a role in these new retail spaces, said John Chang, chief intelligence and analytics officer at Marcus & Millichap.

“Retail has shifted over to entertainment and activities and health, you know, with gyms and fitness and pickleball courts,” he said.

While retail construction in Texas is expected to continue at a decent pace, he does see some signs of cooling. 

“We did see a slowdown in job creation nationwide, and as that's occurring, a lot of the construction in Texas and the rest of the country, quite frankly, is starting to slow down a little bit,” Chang said.

Immigration policies also impact the pace and cost of construction he said — as well as demand for all kinds of commercial real estate.