Target is Finally Coming Back to Houston
For years we’ve been hearing everyone lament that Target hasn’t built a new store here lately. Well, whine no longer, Houston—there will be at least one new location next year. Hear more about Houston’s unprecedented retail development spurt (Target and all) at Bisnow’s retail real estate event on Oct. 8, starting at 7:30am at the Houstonian.
Streetwise Retail Advisors managing partner Ed James says Target is only planning a handful of new stores nationwide next year, and Houston is definitely getting one and may eventually get a second. Big-box anchors are coming back across multiple segments (something Ed’s thankful for; it’s his specialty and it’s been out of favor for a while). He tells us it took a long time for the pent-up demand to force new construction and convince these national groups that it was time to build again; although Houston’s net in-migration and job growth over the last few years were eye-catching, they couldn’t get past the national economy.
But now they’re finally touring and are amazed; Ed recently toured PetSmart around and its reps told him you don’t see this level of retail development anywhere else in the country, and they’re excitedly eyeing five or six new Houston locations. He’s also working with Total Wine to enter the Houston market with a multiple stores opening starting in 2016. Dick’s Sporting Goods is also very active to enter Houston, and Academy, Burlington, TJ Maxx, Ross and Marshalls are continuing their expansion plans. Houston also has some new smaller (12k to 35k SF) soft goods retailers looking to open doors here, including F21 Red (a sized-down offshoot of Forever 21), Lemon Pop (an Old Navy competitor under the Charlotte Russe flag) and Macy’s Backstage.
Arch-Con SVP Marc MacConnell says this is the most construction he’s seen in the retail sector in his 20 years in the business. His team’s got 10 projects in the dirt and six more out to bid. His team’s preparing to break ground on Phase 1 of Valley Ranch for Signorelli. That’ll end up topping 1M SF of retail, one of a handful of projects over 500k SF kicking off soon. It’s anchored by Kroger and Sam’s, and Phase 2 already has Academy lined up to anchor, and could end up with another soft goods anchor as well. And of course, grocers are still keeping him busy. He’s got three Krogers under construction, three more in bidding, and knows there are more in the pipeline.
The River Oaks District celebrated its grand opening yesterday, and Transwestern managing director Nick Hernandez (snapped with his wife, Anna, at yesterday's River Oaks District Cartier party) is more convinced than ever that it sets the standard for luxury shopping centers for Houston if not the US. He says the quality of tenants and build-out will change Houston’s retail sector. It’s pushing 80% leased. As it delivers, he’s got some exciting new mixed-use projects kicking off. Nick’s team is leasing the retail at Generation Park; the first phase has 14k SF. He believes that intersection will become a big regional hub for retail; Fidelis is doing a big development across the street. Nick's team also just began working with Brookfield to re-engineer the retail at Allen Center, and he says they're getting a lot of activity for the retail portions of Springwoods Village.