Shopping Center Survey & Forecast
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20142014 Shopping Center Survey & Forecast Austin g Dallas g Fort Worth g Houston g San Antonio The information contained herein was obtained from sources deemed reliable; however, The Weitzman Group makes no guarantees, warranties or representations as to the completeness or accuracy thereof. The presentation of this real estate information is subject to errors; omissions; change of price; prior sale or lease; or withdrawal without notice. The Weitzman Group, which provides real estate brokerage services, and Cencor Realty Services, which provides property manage- ment and development services, are divisions of Weitzman Management Corporation, a regional realty corporation. Herbert D. Weitzman Chairman/CEO Our 2014 Shopping Center Survey & Forecast shows that our path to improvement continues. On the following pages, you’ll read about key trends in our major Texas retail markets. We look forward to many more successful years with you, our clients and friends. Sincerely, Herbert D. Weitzman We’re bringing the town square back to the neighborhood.® Dallas Fort Worth Austin Houston San Antonio Table of Contents A Tradition of Real Estate Excellence 1. Austin Overview. 4 Major Mall Map . 9 2. Dallas/Fort Worth Overview. 10 Submarket Summary. 16 Submarket Map . 17 Rental Rates . 18 Absorption and Construction 2012 . .20 Major Mall Map . .22 3. Houston Overview. .23 Major Mall Map . .26 4. San Antonio Overview . .29 Submarket Map . .35 Submarket Summary. .36 Major Mall Map . 37 5. Appendix . .38 Defi nitions Company Descriptions Acknowledgements Austin The information contained herein was obtained from sources deemed reliable; however, The Weitzman Group makes no guarantees, warranties or representations as to the completeness or accuracy thereof. The presentation of this real estate information is subject to errors; omissions; change of price; prior sale or lease; or withdrawal without notice. The Weitzman Group, which provides real estate brokerage services, and Cencor Realty Services, which provides property management and development services, are divisions of Weitzman Management Corporation, a regional realty corporation. The Weitzman Group and Cencor Realty Services. The market’s occupancy rate is based on an inventory of approximately 43 million square feet of multi-tenant Austin retail space in centers with 25,000 square feet or more. The improving retail occupancy has led to a tight market for space in key trade areas, as well as Austin: Retail Occupancy at extremely limited supply of end-cap locations and Highest Level in Years pad sites at Class A locations. As a result, rental rates for small-shop space continue the upward trajectory AUSTIN - As of year-end 2013, the Austin retail market they showed in 2012, and rates for well-located pad reported an overall occupancy rate of 95 percent, thanks sites are even stronger. to steady demand for space and extremely limited new The availability of well-located Class A retail is the construction. most constrained, and therefore, this class of rents The 95 percent occupancy rate represents the fi rst leads the market in terms of gains, with average rates time since 2003 that overall market vacancy has above $30 per square foot for shop space in newly declined to 5 percent or less. The market’s recent high constructed projects. For the best-located projects, point was 95.5 percent in 2004. However, Austin’s rates are even higher. occupancy rate has remained above 90 percent for more During 2013, the market repeated the pattern seen than a decade, with the low point being a healthy rate of over the past several years with new construction 90.5 percent in 2006. limited primarily to anchor users such as grocery These fi ndings are based on a review of retail market stores. However, the market is seeing a bump in conditions for the greater Austin construction for small neighborhoodneighborhood stristripp ccenterse area as of year-end 2013 by in the 15,000-square-foot15,000-square-foot range.range. More than 30 of these small, unanchored stripsstrips are in some stages of developmentdevelopment in the tightertighter trade areas, built to meet the demand for restaurant,restaurant, medical offi ce andan other smallsmall spaces.spaces. At Round Rock Crossing, Gander Mountain leased a 48,814-square-foot anchor space for its fi rst Austin- area location. -4- In addition to the lack of new development, the The new theater, a discount movie house, is improvement in occupancy can be attributed in part upgrading the 29,000-square-foot building as it to large-format retailers that are backfi lling key prepares to open in 2014; vacancies on the market. • Trader Joe’s, which opened its fi rst area location Examples include: in September in a space formerly occupied by • Gander Mountain, the nation’s largest retail Sprouts in the Shops at Mira Vista, located network of outdoor specialty stores, which at 2805 Bee Cave Road in Rollingwood. The opened a 48,814-square-foot anchor space at California-based specialty grocer also will open Round Rock Crossing, a regional-draw shopping in 2014 in a portion of the former Saks Fifth center located at IH-35 South and SH-45, for its Avenue box space in Arboretum Market. Plans fi rst Austin-area location; are also under way for Trader Joe’s to anchor the • LA Fitness, which is under way with three retail space in the mixed-use redevelopment of locations, including one at Lamar Oaks, at S. the former Seaholm Power Plant in downtown Lamar and Ben White Boulevard, and one in Austin; former Lack’s Furniture box at 2020 E. Anderson • The Tile Shop, which leased 34,776 square feet Lane; of existing space in Gateway Shopping Center at • Wheatsville Co-op, a locally based grocery 9607 Research Boulevard, and at Highway 290 concept, which also backfi lled a vacant box in and MoPac in South Austin, for stores to open in Lamar Oaks, absorbing a 30,000-square-foot 2014; vacancy in the center; • DD’s Discounts, an off-price concept from Ross • Southwest Theaters, a concept new to Austin, Dress for Less, which leased two locations in which backfi lled the space at existing space for its fi rst stores in the Austin 13729 Research Boulevard market. DD’s leased at 7112 Ed Bluestein vacated in summer 2013 by Boulevard in Northeast Austin and 1819 S. Alamo Drafthouse when it Pleasant Valley in Southeast Austin for stores to relocated to a new facility. open during 2014; Hill Country Galleria is one of the many existing Austin-area retail properties that experienced increased occupancy during 2013. -5- • Melrose women’s apparel retailer and Burke’s • Gloria’s Latin Cuisine, a Dallas-based concept, Outlet discount store, which leased in Tech which opened its second area location at 300 W. Ridge Center, located at IH-35 near Parmer Sixth Street at Lavaca in downtown; Lane; • Snap Kitchen, offering healthy meals for take- • Gold’s Gym, which backfi lled a vacated Barnes out or delivery, which leased its fi fth location & Noble space at The Village at Westlake, an in Old Quarry Village, located on Far West H-E-B-anchored center located at 701 Capital Boulevard near N. MoPac; of Texas Highway South. Gold’s Gym will also • Verts, a local restaurant chain specializing in open in part of the space vacated by Shepler’s döner kebap, with three new locations set to Western Wear when it relocated to the Target- open in the fi rst quarter of 2014; anchored Capital Plaza. Additionally, Aveda • bevello, a one-of-a-kind women’s designer Institute will occupy approximately 17,400 boutique for clothing, shoes, accessories and square feet of the former Shepler’s building, gifts, which leased 3,248 square feet of retail located at 6001 Middle Fiskville Road. space in The Domain, an open-air lifestyle and Austin also experienced a good level of smaller- mixed-use center located at 11410 Century Oaks format retail and restaurant activity, with many Terrace, for its fi rst Austin location; concepts expanding in existing center space. • Maudie’s Cafe, an Austin tradition since 1954 New and expanding concepts opening or (switched from home-style to Tex-Mex in 1992), committing to space during 2013 included: which leased space for its seventh location in • Chef Bryce Gilmore, renowned for Barley Swine, The Triangle, a mixed-use landmark located at who opened Odd Duck, a high-profi le local 4616 Triangle Avenue. The Triangle location is set concept, in a brick-and-mortar location at 1201 to open in March 2014; S. Lamar; • California-based Pieology, a high-quality • Twisted Root Burger Company, a chef-driven pizzeria with a focus on healthy custom pies, burger joint, which opened its fi rst Austin-area which leased 3,000 square feet in Cedar Park location in 2,899 square feet of street-level Town Center, anchored by Costco, as well as a space in GrandMarc, a mixed-use residential- location in Central Austin, for stores to open in and-retail project located at 510 W. 26th Street. the second quarter 2014. The locations will be Twisted Root will open a second location in the fi rst in the Austin area for the restaurant; Centennial Shopping Center, located at 7301 Burnet Road; Centennial Shopping Center, originally built in 1970 at 7301 Burnet Road, is currently undergoing a major renovation. New concepts leasing in the center include Twisted Root Burger Company, Tacodeli, Teriyaki Madness and Sola Salons. -6- • UFC GYM, the fi rst major brand extension for the Additionally, the fi rst Central Texas location for Ultimate Fighting Championship, which leased In-N-Out Burger opened in Round Rock, followed 4,000 square feet in Southpark Meadows, by a location on Airport Boulevard.