Tight real estate market delays franchise’s Houston entry
Why the delay in In-N-Out Burger setting up shop in Houston?
One factor is distribution, NAI Partners senior vice president of retail services Jason Gaines said at a quarterly update Wednesday on the Houston real estate market.
Unlike the Dallas and Austin markets, Houston is not on the path of the Interstate 35 corridor where the popular California burger chain has grown since entering Texas in 2011.
“For them or any other retailer like them, to decide to pull the trigger on opening in a new market like Houston, they need to have scale,” Gaines said. “They would need like half a dozen locations all ready to go, but they couldn’t get enough locations of what they were looking for. They are just now entering the market five or six years later.”
In-N-Out Burger plans to open its initial area location in The Grid, a redevelopment of the Texas Instruments campus underway in Stafford. The company has committed to another location near Katy Mills Mall, Gaines said. It owns a property at 8373 Westheimer.
A look at the company’s locator map reveals 37 In-N-Out Burgers
in Texas, and they span Interstate 35 from San Antonio northward to Frisco in the Dallas area.
The chain’s more than 300 locations in six states are within a day’s drive of three central warehouses so that meat and other ingredients stay fresh. The company’s warehouse and pattymaking facility in Dallas opened in 2011.
In-N-Out Burger, which has an enthusiastic fan base that rivals that of Texasbased Whataburger, serves the same menu of made-toorder burgers and fries as when it was founded in Baldwin Park, Calif., in 1948. Customers don’t seem to mind the long lines.
With Houston’s tight market for retail real estate, In-N-Out Burger is just one of the companies that’s had difficulty finding the right places.
The Dog Stop, a dog care provider and retail store, is looking at a dozen or so stores in the Houston market, Gaines said. Until it can secure five or six locations that suit its needs, it’s not going to move into the local market.
“Our market is tight enough with less than 5 percent vacancy in the last five years, there’s not enough opportunity in vacancy for a lot of retailers to make a bigger push in Houston,” Gaines said. “No doubt retailers want to be in Houston. They just want to find what they’re looking for.”