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In the next 30 days, KM Realty Advisors will be breaking ground on three suburban shopping centers around Houston: The Shops at Aliana in Richmond, The Shops at Pine Mill Ranch in Katy, and Town Plaza III near The Woodlands. KM Realty's Steven Stone tells us the projects total 40k SF and are a healthy 66.4% pre-leased. He chatted with us about the strategy of focusing on suburban shopping centers near master planned communities.
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Over the past few years, KM Realty has found that building near master planned communities comes with unique challenges like design guidelines and prohibited uses. But Steven likes the high barriers to entry, which lead to limited supply and thus higher-quality tenants. The benefits of building near a high concentration of high-income households with population growth that drives demand outweighs the burden. With a number of grocery-anchored/power center developments coming online this year, developers like KM Realty may lose steam in 2016. Steven remains optimistic, though; he sees more regional and national retailers entering suburban markets now that growth can be quantified.
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