Build them, hold them
A real estate executive talks about the Weitzman company’s policy on retail developments.
Texas real estate firm Weitzman has headed 19 retail developments in the Houston market that are mostly anchored by grocers such as Kroger, H-E-B and Walmart. The company leases 4 million square feet and manages 4.2 million square feet of retail space across the Houston region.
Ten years after completing The Crossing at 288 in Pearland, one of its bigger area developments, Weitzman is gearing up for its largest project yet on 200 acres a few miles south in Manvel.
Steve Chandler, city partner and senior vice president for the Houston office, oversees project development, property management, asset management and the brokerage team. Chandler, who joined the firm in 2002, visited the Chronicle recently to talk retail. Edited excerpts follow.
Q: Can you provide an overview of Weitzman?
A: The Weitzman company started in 1989 in kind of the downturn. We have offices in Dallas-Fort Worth, Austin, San Antonio and Houston. Houston opened in 1992. We’re really retail specialists. We’re truly a vertical company. What that means is we have all the full services — management, leasing, construction, asset management and development. We have all the pieces to perform all services.
Q: What are your observations about Houston retail?
A: We have been through a downturn that really started in ’08, ’09 with the subprime housing. We got our legs back, and then in ’14, the oil and gas downturn created some issues. We’re back to 5 percent vacancy. We’re in a very healthy position. Q: Which areas of town need more retail? A:
Retail always is a trailing indicator to rooftops. So as you see more housing, you’re always going to see a component of increased retail. The Grand Parkway is a great area where you’re seeing a lot of expansion, and inside the Loop. The south and southeast market has been strong with downstream growth, chemical plants.
Q: Tell me about some of your developments.
A: We have several that we’re in the process of developing. One is in Deer Park where years ago we created a Walmart development. Now we’ve added an H-E-B development across the street that will be 61 acres. We’ll continue to grow that with different retailers into the future.
Q: Do you sell your developments?
A: We don’t have a history of selling yet. Our model is to build and hold. Q: What about your retail centers along the Texas 288 corridor? A: We have two developments in Pearland that are stabilized and successful. We’ve been in Pearland since the early 2000s. We have close to 200 acres at 288 and Highway 6 in Manvel. We’re hoping to be breaking ground within 12 months with a grocer and multiple tenants.
Q: Is access a concern along Texas 288?
A: In time, there will be a feeder road added from Rodeo Palms to Highway 6 as part of the infrastructure development. That will be done subsequent to us starting.
Q: How big will it be upon completion?
A: We expect it to be 1 million square feet or more. There’s a seven-year window to complete it. It will be built in phases, with the first stores opening in 2019.
Q: What will Manvel Town Center have other than shops and restaurants?
A: It will have walking and water features. Apartments aren’t contemplated at this time. It could be anything. Hospitality, office, services, medical. Q: How are online retailers affecting the market? A: We are not at a stage we have total awareness of what impact has taken place. There’s a lot of concern of potential headwinds. We do know with Amazon buying Whole Foods, that has made a clear signal that they need to have tangible product out in the marketplace. It’s always going to be shifting. I do think e-trade will be part of the experience we all have with retail. Q: Are you making changes to adapt to the market? A: We’re moving into digital marketing, which is a big step into the future. As it’s rolled out statewide, this digital marketing campaign will connect several digital platforms to draw consumers to our shopping centers. Enhanced shopping center websites and dynamic content on Instagram, Facebook, and more will allow our centers and our retailers to show up prominently as potential customers search for restaurants, entertainment, services and more.