Mar 25
Throughout the energy slump, retail’s remained relatively hardy. There’s still heaps of activity going on throughout Houston — take the national anchor tenant that just signed on to a 40-acre Cinco Ranch retail project or the Grand Parkway retail center that nabbed other big tenants.
Retailers are switching their focus toward one submarket in particular, though, and away from another that’s had historically high exposure to the energy markets.
“(There’s) a dark cloud over the Energy Corridor and perhaps a few rays of sunshine on the east side of the city,” said Kenneth Katz of Houston-based Baker Katz LLC. “If there is one shift that’s come out of the last 12 months or so, it’s an increased focused for retailers on the east side of the city and approaching the Energy Corridor with a little more caution.”
The east side of Houston has job-creating assets like the Port of Houston, which will further benefit from the soon-to-be-expanded Panama Canal. It also houses much of Houston’s thriving petrochemical industry. And for national retailers doing business in east Houston, Katz said their experience can be rooted in “confusion” more than anything else, based on the barrage of oil slump coverage contrasting with their positive experiences of doing business in Houston.
Regarding Baker Katz’s own experience in east Houston, Jason Baker said the firm is exploring “uplease” options to distressed assets. The firm is about to begin a remodel on an east Houston property near Interstate 10 and Federal Road, he said, but didn’t close additional details on the property.
“It’s been completely overlooked — neglected, even,” Baker said. “With its proximity to the ship channel and the (Port of Houston), there’s a lot more disposable income than people might have thought.”
Retailers’ pro-development attitude regarding east Houston properties has helped spur interest in the Baker Katz project.
“If we would’ve sent this out to brokers or tenants 12 months ago, I don’t think we would’ve got a single response,” Baker said.
Original article can be viewed here.
