Texas Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in Texas.
Issue link: https://texasrealestatebusiness.epubxp.com/i/591312
46 • November 2015 • Texas Real Estate Business www.REBusinessOnline.com growth. You still have absolute real growth over the last fve years of peo- ple, and they're not going to go home tomorrow. We're taking advantage of national platform. When people say, 'Gee, we'd like to go to Houston,' the beauty is, we're forecasting out 12 to 14 months who is going to be there, and we've already got a lease formed, so entry into the market is a lot easier for them. We've already negotiated the tough stuf, now it's just being able to fnd a deal that works econom- ically for them. TREB: Eric, where do retailers want to go when they come to town? Lestin: It depends on the use. The restaurants all want the space close to Westheimer. We have an optom- etrist who saw a lack of her specialty in Katy, and so she is going out there. It's driven by the demographics, the roof tops and the income. That really hasn't changed. For the restaurants, which are the majority of my clients, they're looking to fll in the holes be- tween where they currently operate and where they can ft in. Those com- ing from other cities naturally want to make the highest and deepest splash, so they're looking at the highest in- come with the greatest density. TREB: Kenneth, what are you see- ing with in terms of retailers coming to the market? Katz: Most retailers, when they look at the Houston market, tend to look at certain trade areas and break them into tiers. You've got frst, sec- ond, third and fourth tier trade areas. Those top tier trade areas are general- ly of interest to retailers when they're frst making a market entry. Even mar- kets that historically have not been in the frst tier, or have been in the sec- ond or third tier, like Baytown, are getting a lot of attention recently. We can certainly talk about the desirabil- ity of one trade area or one suburban market over another, but the reality is for a retailer that wants to efectively penetrate the Houston market, ulti- mately all of those trade areas they want a presence in. Every one of those markets are desirable to one degree or another, it's just about whether or not it fts from a timing standpoint where that retailer is in their expansion pro- gram. TREB: I'd like to ask the national owners here, are you having trouble fnding spaces when a retailer comes to town and says that they are going to open fve stores? Is there space to be had? Are you dividing boxes, or what are you doing to sort of make that work? Vondrak: We're doing all of that. We're dividing spaces. If we have enough heads up, we can relocate and reposition tenants within the shop- ping center to help facilitate that. Axelrad: To Mark's point, that's a big part is trying to get out 12 to 18 months and doing planning because otherwise you will fnd yourself where you just literally cannot meet the demand. TREB: Has that changed from say fve to six years ago? Did you have to worry about that 12 to 18 months out, or was it more post recession? Vondrak: You had a lot of new de- velopment before, so there were al- ways new shopping centers. There was such a glut of shopping centers that if you were coming in, you just went to whoever the developer was that was building a new shopping center, and you got in. It's not like that now, so the retailers have to be very specifc. As a national owner, there's a comfort level for the national tenants coming in because we have existing relationships with them. Crump: Five years ago, you were dealing with boxes. That was the fo- cus. We have had a lot of bankrupt- cies. We worked through that, and then we started focusing on small shop space, and that occupancy has increased dramatically since that pe- riod of time. Now, we're looking at the merchandising, looking out 12 to 24 months and upgrading our tenant mix with those more desirable tenants that we want in our centers long term. TREB: Who are some of those ten- ants that you're looking at? Crump: On the restaurant side, we're looking to upgrade our tenant mix, and it may not be necessarily the national tenant, but some of those lo- cal, chef-driven concepts like Clark Cooper; they've got a great line of res- taurants with fve, six locations and that seems to be one of the hottest ten- ants out there. Anything they touch is good. There's also a lot of farm-to-ta- ble type restaurants that are out there that are neat, chef-driven concepts that you're seeing in core and in the suburbs popping up. TREB: Would you say over the past fve or six years your merchandising mix is going up in a lot of these cen- ters that are infll oriented? Crump: I would say our tenant mix is getting better. We have culled our portfolio over the last four or fve years and sold of the B, B- cen- ters and focused more on core assets or core A properties. We've improved our overall tenant mix just by selling of the tertiary and secondary market centers, but the core just continues to get stronger. We've seen most of our centers become more service oriented over the last couple of years. Health and wellness has been hot. The medi- cal guys and the dental guys have all been very active and they're mostly feeding of of our grocery. Our grocers are driving a lot of trafc into the cen- ters on a daily basis. TREB: How important is credit these days? It used to be that you had to have credit to have a tenant, now it seems like you would rather have the hot concept. Gilliam: I don't know that you have to trade credit for hot concepts. So many of the restaurateurs have pretty good credit — even if they're local en- trepreneurs like Clark Cooper, or guys from Atlanta like Ford Fry — they're well fnanced, they invest in their own businesses. From a landlord stand- point, they don't have national credit per se but are solid credits in terms of experience and capabilities to sell. TREB: Do you ever get push back from an owner saying 'who are these guys?' and 'what are they doing?' Gilliam: Oh, yeah. There was a time when Clark Cooper only had one res- taurant, and somebody took a chance on them. Of course that wasn't a land- lord, it was an investor, and they built from there just like other folks but you have to spend time educating land- lords on why it makes sense for them, and if you have to spend too much time, sometimes it doesn't work, but Weatherford MarketPlace Center Weatherford Ridge Center City of Weatherford Economic Development 202 W. Oak St. | Weatherford, Texas 76086 | 817.594.9429 | Direct 817.598.4302 dclayton@weatherfordtx.gov; www.weatherfordtxeda.org sf Weatherford Phy Rehab Hospital 50K sf Roger Williams CDJR AutoMall 74K sf "Film Alley Weatherford" KEG1 O'Neal Regional Distribution Center - 80K sf/40 acre Flex-WH BP Imperial Construction Corp HQ Office - 33K sf QT 7K sf TC ALDI Anchored SC/ RaceTrac El Fenix 25-miles west of DFW Metroplex 2014 - 2015 "New Openings!" "Coming" in 2015 - 2016 "The Western Gateway Business Centre of the DFW Metroplex" 27,769 (2014) City Population 123,164 (2014) County Population 3.3 + % Growth/Year since 2000 Fort Worth-Arlington MD/DFW MSA. 60,170 + County CLF. 96,800 pop. Primary TRADE AREA. 174,100 pop. Secondary TRADE AREA With fewer shopping centers coming to market, Mark Vondrak of InvenTrust Properties believes shopping center owners must be more selective when choosing tenants.