RECORD YEAR

Houston Chronicle - - TEXAS INC - By Kather­ine Feser STAFF WRITER kather­[email protected] twit­ter.com/kfeser

The Hous­ton area likely reached an all-time high for re­tail in­vest­ment cap­i­tal in 2018.

The Hous­ton re­gion at­tracted a record amount of cap­i­tal in 2018 as shop­ping cen­ters re­mained largely full, with the ex­cep­tion of some trou­bled re­tail­ers.

The Hous­ton area closed out 2018 with the ad­di­tion of 2.7 mil­lion square feet of re­tail space, roughly match­ing the pre­vi­ous year, com­mer­cial real es­tate firm Weitz­man said. The re­gion’s oc­cu­pancy rate slipped 1 per­cent­age point to 94 per­cent in 2018. That com­pares with 95.8 per­cent in Austin, 92.4 per­cent in Dal­las-Fort Worth and 94.0 per­cent in San An­to­nio.

Oc­cu­pancy lev­els re­mained strong even as strug­gling re­tail­ers such as Toys R Us and Sears va­cated space.

For the year, Toys R Us closed 18 stores to­tal­ing 675,000 square feet. Sears clo­sures in­cluded its 200,000-square-foot Me­mo­rial City Mall store, its 152,000square-foot store at San Jac­into Mall and its Mid­town lo­ca­tion.

Ran­dalls closed seven gro­cery stores, some of which are be­ing filled by ten­ants such as El Ran­cho Su­per­me­r­cado and Star Fur­ni­ture.

New and ex­pand­ing re­tail­ers in­cluded Gord­mans, a dis­count depart­ment store op­er­ated by Stage Stores, Ur­ban Air Ad­ven­ture Park, Sa­lons by JC, Alamo Draft­house Cin­ema, Xs­cape The­aters, Floor & Decor, Life Time Fit­ness, Du­luth Trad­ing Co., PGA Tour Su­per­store, HE-B, Kroger, Joe V’s Smart Shop, H Mart, Aldi, 365 by Whole Foods Mar­ket and Costco.

New re­tail space is pro­jected to de­cline in 2019 after re­cently peak­ing at 3.4 mil­lion square feet in 2016. Weitz­man tracks a to­tal in­ven­tory of 160.5 mil­lion square feet across the Hous­ton re­gion.

On the in­vest­ment side, it looks like Hous­ton will hit record re­tail sales vol­umes in 2018. The area is ex­pected to rank fifth in the na­tion for re­tail deal vol­ume in 2018, ac­cord­ing to re­search firm Real Cap­i­tal An­a­lyt­ics. The to­tal, which re­flects Brook­field’s ac­qui­si­tion of Gen­eral Growth Prop­er­ties in ad­di­tion to in­di­vid­ual prop­erty sales, would eclipse the pre­vi­ous record of $2.1 bil­lion in 2007.

Dal­las ranked ahead of Hous­ton for in­vest­ment in 2018, and be­hind top-ranked Los An­ge­les, Man­hat­tan and Chicago, Real Cap­i­tal An­a­lyt­ics said.

Brook­field added Bay­brook, Deer­brook, First Colony, The Wood­lands and Wil­low­brook malls to its re­tail port­fo­lio.

Among the no­table deals, Asana Part­ners of Char­lotte, N.C., bought Heights Mer­can­tile and three other re­tail re­de­vel­op­ments from Hous­ton de­vel­oper Radom Cap­i­tal.

In­vestors pur­chased H-E-B stores in Tan­gle­wood and Bel­laire in two sep­a­rate trans­ac­tions last year.

In re­cent deals, Hous­ton­based Wil­liams­burg En­ter­prises boosted its port­fo­lio to 1.1 mil­lion square feet across 31 re­tail prop­er­ties, all in the Hous­ton area, after sev­eral trans­ac­tions in Oc­to­ber.

Wil­liams­burg pur­chased the 156,190-square-foot West Oaks Shop­ping Cen­ter, at 14409 Parkhol­low Drive, from BET In­vest­ments. Si­mul­ta­ne­ously, Wil­liams­burg sold the ad­ja­cent 96,500-square-foot Burling­ton Coat Fac­tory, at 14411 Wes­theimer, to Alief ISD. The trans­ac­tion in­cluded a $3.5 mil­lion do­na­tion to the school dis­trict, which plans to re­de­velop it as a mul­ti­pur­pose cen­ter.

It ac­quired two prop­er­ties from Brix­mor Prop­erty Group: Klein Square, an 80,836-square­foot cen­ter at 16812 Stueb­ner Air­line at Lou­etta Road in Spring; and Plan­ta­tion Plaza, a 98,141-square-foot cen­ter at 101 Dixie Drive at Plan­ta­tion Drive in Clute, near Lake Jack­son. Scott He­nard of Matthews Shop­ping Cen­ter Divi­sion rep­re­sented the seller. Wil­liams­burg is plan­ning to ren­o­vate both cen­ters, which were un­der 50 per­cent leased at the time of sale.

The com­pany pur­chased a 46,000-square-foot cen­ter at 9411 North Free­way near West Mount Hous­ton Road from David F. Bol­ger Re­vo­ca­ble Trust with as­sis­tance from Matthew Berry at CBRE.

In other trans­ac­tions, Gess­ner Plaza, a 51,400-square foot cen­ter at 8703 West Bell­fort, re­cently changed hands. Mar­cus & Mil­lichap rep­re­sented a Hous­ton-based part­ner­ship in the sale.

Staff file photo

Brook­field added The Wood­lands Mall, along with other malls at Bay­brook, Deer­brook, First Colony and Wil­low­brook, to its re­tail port­fo­lio through the ac­qui­si­tion of Gen­eral Growth Prop­er­ties in 2018.

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