Build them, hold them

Houston Chronicle Sunday - - BUSINESS - By Kather­ine Feser kather­ine.feser@chron.com twitter.com/ kfeser

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.

D a v i d F u n c h e s / H o u s t o n C h r o n i c l e

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