Feb 14

Sears reportedly to close two more Houston-area stores

The Sears at Deerbrook and Willowbrook malls are reportedly closing, opening up a rare opportunity for the malls to redevelop a large portion of its retail space.

The closures would join Sears locations that have shuttered in Midtown, Memorial City Mall, West Oaks Mall, Central Mall in Porter, San Jacinto Mall in Baytown, Mall of the Mailand in Texas City and Parkdale Mall in Beaumont in recent years.

Larry Costello, spokesman for Sears parent company Transformco, declined to comment on the closures, which were first reported by USA Today and Community Impact Newspaper. Brookfield Properties, the Chicago-based owner of the two malls, declined to comment because it does not own the Sears real estate.

Jason Baker, a retail broker with Houston-based Baker Katz, who is not involved with the properties, said the closures would not surprise him. Sears, which emerged from Chapter 11 bankruptcy last year, has shuttered more than 500 stores over the past five years in its ongoing efforts to streamline operations amid declining sales and foot traffic.

After the Deerbrook and Willowbrook stores close, only two Sears locations will remain in the Houston area: the longtime North Shepherd location and Macroplaza Mall in Pasadena.

“Unless you’ve had your head in the sand, the story around Sears is it’s dying or dead,” Baker said. “But it’s created a real opportunity to reposition malls. There’s more good than bad here.”

UPDATE OPPORTUNITY

Mall owners nationally are seizing opportunities to redevelop Sears space to attract consumers increasingly shopping online. Local Sears stores have become a Nordstrom at The Woodlands Mall, a future start-up hub at the Midtown location and a new car dealership in the case of Westwood Mall.

It’s not easy to redevelop Sears properties. The department stores are large, multi-story building that can be difficult to split up and find new tenants. Mall owners must negotiate with Sears real estate owner Seritage Growth Properties as well as other anchor tenants to redevelop the stores.

Some owners are taking the Sears closures as an opportunity to re-imagine the entire mall.

MetroNational last year inked an agreement with Seritage to redevelop a 209,000-square-foot Sears store, which closed in late 2018. But the prolific Houston developer also hired Trademark Property Co. to re-envision the 1.7-million-square-foot mall with more outdoor space, restaurants and mixed-use tenants.

Likewise, Fidelis Realty Partners began demolishing most of the San Jacinto Mall, one year after the 152,000-square-foot Sears store closed in 2018. The Houston developer is redeveloping the mall into a so-called lifestyle center featuring 1.1 million square feet of shops, 80,000 square feet of offices, 20 restaurants and an outdoor concert space the size of two football fields. The first phase of the new shopping center is expected to open later this year.

PRIME PROPERTY

The latest Sears closures would leave a 147,110-square-foot and a 174,663-square-foot vacancy at Deerbrook and Willowbrook malls, respectively.

Baker, the retail broker, said Sears occupies some of the best real estate within the two malls. At the Deerbrook mall, in particular, the department store is the first anchor tenant most drivers see when they exit FM 1960 to go to the mall.

“There are no cars and no traffic in front of that Sears,” Baker said. “If I’m a mall owner, that Sears is an albatross. (The closure) is their best chance of changing that.”

Brookfield declined to comment on its plans for the malls, but said it was a long history of redeveloping retail.

Baybrook Mall, which lost its Sears in 2018, added a 285-square-foot lifestyle center with more than 30 new retailers and restaurants surrounding a large green space. First Colony Mall, which never had a Sears, replaced two reflecting ponds with a green space surrounded by patio restaurants, chairs and lawn games as well as a large video screen.

Written by Paul Takahashi
Houston Chronicle

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Feb 4

Baker Katz sells retail development near Baybrook Mall

By Katherine Feser | houstoncrhonicle.com

Dallas-based Crow Holdings purchased a retail development housing several popular restaurant chains in southeast Houston near Baybrook Mall from Baker Katz. The development totals 15,600 square feet in two buildings.

Houston-based Baker Katz, which broke ground on the former site of Zio’s Italian Restaurant at the end of 2017, completed construction of the development at 820 W. Bay Area Blvd. in the first quarter of 2018. The project is fully leased to Snooze A.M. Eatery, Mod Pizza, Hopdoddy Burger Bar, Main Squeeze Juice, Xfinity and PNC Bank. All of the tenants are open except, PNC Bank which is slated to open in the spring.

Terms of the deal, which closed Jan. 24, were not disclosed. The property is valued at $3.3 million on the Harris County tax rolls.

“By developing in such a desirable area, and going above and beyond in terms of architecture and design to appeal specifically to restaurant tenants, we experienced a high level of interest in this project from the get-go,” Baker Katz Development Partner Neal Wade said in an announcement “Once we built a roster of high quality, national tenants that fully occupied the available spaces, we were primed for a sale to the right partner. Crow Holdings expressed interest and we were able to work quickly to make a deal that made sense for all parties involved.”

Ryan West of JLL represented the Baker Katz in the sale.

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