Apr 29

Retail Wrap: P.F. Chang’s China Bistro, Chipotle, Original Chop Shop, Postino ink new locations

Houston-based Baker Katz announced expansions for several restaurants. Chipotle, represented by Traci Holman of Baker Katz, signed leases at 4045 Little York Road in Houston, 2555 East League City Parkway in League City and at Interstate 10 and Texas 146 in Mont Belvieu. Eric Walker of Capital Retail represented the landlord in the Little York lease. Jacob Weersing of Capital Retail represented the landlord in the League City lease. Baker Katz negotiated for the landlord in Mont Belvieu. Chipotle, which has other locations under construction in Cinco Ranch and Kingwood, announced plans to open 200 restaurants in 2021.

Original Chop Shop, represented by Ben Brown of Baker Katz, leased 3,500 square feet in the Tanglewood Shopping Center at San Felipe Street and South Post Oak. Josh Friedlander with NewQuest Properties represented the landlord. Original Chop Shop also leased 2,921 square feet at the Centre at River Oaks, at 3021 Kirby. The landlord was represented by Crystal Allen of Transwestern Real Estate Services. Both locations will open this summer.

Postino, a food and wine café represented by Traci Holman of Baker Katz, leased 3,643 square feet in Uptown Park at Loop 610 and Post Oak Boulevard. Michael Hale of Edens represented the landlord. Postino also leased 4,137 square feet at 791 Town & Country Blvd. Ed James of Streetwise Retail Advisors represented the landlord.

Charleys Philly Steaks will open an 1,800-square-foot location at Atascocita Shopping Center in Humble and another in Beaumont’s Westmont Shopping Center. John Frazier of Baker Katz represented Charleys in both deals.

P.F. Chang’s China Bistro signed a long-term lease for 6,135 square feet at Galleria Park, an office and retail campus at 5251 Westheimer at Sage across from the Galleria. Loch Cook and Nick Hernandez of Transwestern Real Estate Services represented the tenant, which is relocating from nearby Highland Village. Opening is planned in August.

“The move provides an opportunity for exciting new interior design and a covered patio overlooking the Grand Lawn,” Cook said in an announcement.

Cook, who recently represented the landlord of 1911 Bagby in Midtown in a lease with James Hardin’s Thirteen Houston restaurant, said Houston restaurants are positioning for a strong comeback as the vaccine rolls out.

The Galleria announced retail activity. Joey Uptown, a Canadian restaurant brand, will open its first Texas location. John Varvato is now open and new stores are coming for Louis Vuitton Men’s, Moncler and rag & bone. Giorgio Armani opened an interim boutique and will debut a new store this fall. Valentino now occupies a renovated flagship boutique.

Village Medical leased 3,756 square feet at Oak Forest Shopping Center, a Kroger-anchored center on west 43rd Street at Ella Boulevard. Christi Vinzant of Weingarten Realty represented the landlord. Chris Wadley of JLL represented the tenant.

Clean and Clear Pools lease 2,000 square feet in the Easton Commons Shopping Center, at 8542 Texas 6 N. Wulfe & Co. handled the transaction.

Leven Bakery & Coffee Bar leased 2,100 square feet in Southside Commons, a mixed-use development at 4191 Bellaire Blvd. Christie Amezquita and Suzy Thompson with Shop Cos. represented the landlord, MM Bellaire One. Opening is planned in the third quarter.

By Katherine Feser
Chron.com

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Apr 9

New breed of retailer helps malls experience a revival

Seventy-foot spaceships and intergalactic tunnels now occupy a 40,000-square-foot space in Village at the West Oaks that once housed shelves brimming with bedding and home goods.

Gone is traditional big-box retailer Bed Bath and Beyond, and in its place has risen Seismique, a retailer designed to at once appeal to a younger audience more interested in experiences than accumulating things while at the same time breathing new life into an ailing mall.

Even before the pandemic trounced retail, big chains were casting big boxes aside as they shifter to e-commerce, shrinking their physical footprint and leaving giant holes in shopping centers across Houston and the country.

The retrenchment was accelerated by the pandemic, with retail occupancy falling 60 basis points in Houston to less than 94 percent over the course of the last year, according to NAI Partners, the first time it dipped below that level since 2014.

The decline hurt both retailers and investors. New real estate development also declined 25 percent, according to NAI. But turnover also offers an opportunity to reimagine traditional retail spaces.

And that is part of the appeal of experiential retailers such as Seismique. The expectation is that they will occupy large-store formats fewer traditional retailers will take while drawing crowds that spill into surrounding shops and boost a shopping center’s profile.

“What we’re finding is the big boxes are shrinking their footprint because they don’t need the floorspace. The problem for a landlord would be trying to split those boxes,” said Kirt Rimpela, of Wu Property Management, which operates 1.6 million square feet of retail across 14 shopping centers in greater Houston, including the one that now houses Seismique. “You have to find those alternative tenants, which is where Seismique comes in.”

An experiential retailer can lift a whole development, said Matt Raga, director of property programming and leasing for Rebees, a Dallas firm that works with the Dallas-based developer Lionstone. For the redevelopment of downtown Sugar Land they’re working on, Lionstone and Rebees are bringing special effects company Flight School into the old Z Gallerie after the big-box furniture retailer shuttered the store in 2019.

The augmented reality space aims to transport customers to a fantastical world where a lightkeeper hands them a lantern that can be used to collect light.

“The demand for this kind of content is just enormous,” Raga said. “We see this as a seeder…It’s just a great magnet it just pulls people in.”

As people do more of their day-to-day shopping online, retail centers built around big boxes have to be remade around experiences, he said, so consumers have a reason to leave home and engage with things they can see, feel, taste and touch.

“There’s 2 trillion square feet of retail in the U.S. and a lot of that was empty pre-COVID and a lot of it is going to be coming up empty,” Ragan said. “We think we’ve got a lot of opportunities over the next couple of years to take some retail and turn it into something special and unique.”

Jason Baker, whose Baker Katz owns 30 shopping centers, agreed.

“That’s one of the big pivots moving forward, is how you’re driving traffic to retail,” he said. “And I think experiential is at least part of the path forward.”

Shopping centers designed in the 1980s were built around big boxes where people came to check items off their shopping lists. David Glover, the new chief creative officer at developeter MetroNational and former executive director at Universal Studios now charged with reimagining Memorial City Mall’s more experience-based future, describes them as “houses of brands” all mashed together with little thought paid to any thread to tie them all together.

Conversely, he said, when you step into a place like Disneyland, you show up knowing “great things are going to happen to you.” He calls Disney a branded house, built upon programming, unified design and shared experiences that inspire people to get up and out of their chair and visit in person.

“That’s what we’re doing, is transforming Memorial City into a branded house,” Glover said.

The shift comes as companies such as Bed Bath and Beyond find that giant retail spaces have become a burden. At the same time, Seismique creator Steve Kopelman saw the space as a blank slate. And his creation scratches the itch of a generation more interested in experiences than it is things.

“The younger generation, they don’t strive to get a Rolex. They strive to see the sun rise at Machu Picchu,” he said. “I think we’ve given them that sunrise.”

Seismique has been selling out on weekends at its 30 percent capacity limit, Kopelman said, noting he’ll likely start allowing 50 percent of his roughly 1,200-person capacity inside this summer. He said he is confident he’ll recoup his more than $7 million capital investment within the company’s first two years.

“Even with COVID, we’ll do that,” he said last week.

Kopelman said he expects about 30 percent of his annual business will come from tourists, once travel resumes.

Wu Property Management, Seismique’s landlord, is fielding interest from other virtual reality and entertainment companies looking for space, Rimpela said.

“There’s going to be more of that happening. It’s just that those concepts are just now coming to fruition,” he said.

But consumers can be fickle, so this new type of retailer will have to work to hold their interest, said Venky Shankar, research director of Texas A&M University’s Center for Retailing Studies.

“Retail is always cyclical. people get fascinated with some concepts and then after a few years they want different ones,” he said. “It’s very hard to make any of them stick for any amount of time.”

Still, Kopelman expects his concept has staying power. it’s a big open box with a big free parking lot, and the way the space is designed guests can go one of four ways. There’s no one path to follow.

“They’re free to stay here as long as they want,” Kopelman said. “There is no wrong way.”

By Amanda Drane
Houston Chronicle

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Apr 6

Report projects 80,000 store closings in coming years

While the pandemic has made it impossible for some retailers to stay in business, a new report suggests tens of thousands of retailers could disappear in the coming years.

The problem, according to investment bank UBS, is too much space and not enough customers. As a result, the bank projects 80,000 fewer retail stores by 2026.

On a sunny afternoon in Rice Village, where people typically come to shop or eat, traffic is still slow, thanks to the pandemic and other shopping options.

“I’m not surprised,” says Emma as she strolled among the stores. “I feel like the retail industry was kind of struggling and moving online, anyway.”

That’s part of the equation for the UBS report. As online business continues to grow, there is just too much retail floor space to sustain potential shoppers.

The year started with 115,000 shopping centers across the county, including strip centers, malls, and outlet locations. The pandemic has not been their only challenge.

“The reality is that a lot of the retailers that we saw close, through COVID, most of these were already in trouble,” says Houston commercial real estate broker Jason Baker.

The UBS report notes that store openings have outpaced closings, so far this year. That’s, in part, thanks to government stimulus programs that will not be able to keep doors open indefinitely.

Instead, individual locations and once-popular shopping malls may struggle to find anyone willing to come spend their money.

“The strong regional malls, I think, will continue to get stronger,” says Baker, “I think we’ll continue to see older malls, ones that are less well positioned, be repurposed. We’re seeing that all across the country, not just in Houston.”

So what stays, and what goes? The report forecasts clothing, office supplies, and sporting goods retailers to be among the hardest hit. Grocery, home improvement and discount retailers are projected to weather the cuts.

By Tom Zizka
FOX 26 Houston

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