Businesses seeking to lease Houston retail space will often have to consider several factors before determining the best type of retail space for lease to fit their needs. Some retail businesses rely on "impulse purchases" while others rely on carefully planned purchases. Impulse retail will focus heavily on location and visibility, and will usually require a premium location within a shopping center, meaning higher rents. Businesses that aren't reliant on impulse purchases don't typically need to be in an incredible location with optimal visibility, although that's always important for any type of business. Access and visibility are much less important for "destination" retail, but again, will always help. Here are the different types of retail space for lease, with descriptions:
The recession’s hit to Houston retail space has been well documented. In this recent article in the Wall Street Journal, several stats from a survey by Colliers International covering the closures of four prominent big-box retailers over the last couple of years are particularly sobering. Just over half of the surveyed properties are still vacant and the rest of them were re-leased for rents that averages almost 20% less than what the previous tenants were paying. As the article points out, the recent bankruptcies of Blockbuster and Borders will only add to the problems. One positive note is that none of the seven borders locations in Houston were on the initial chopping block so it appears that Houston retail space is holding up better than other national markets.
Anchor Tenant typically refers to a large store in a retail shopping center (usually a department store or major retail outfit like HEB or Walmart) which the landlord has strategically rented space to in order to draw in large crowds and funnel them into other stores within the center. Name recognition and prestige of these large users are the appealing factors that will drive in other tenants and shoppers. Because of the value that an anchor tenant can provide the landlord as far as appeal to other smaller tenants and heavy traffic draw, discounted rental rates can often be given to these large users. It's not uncommon for an anchor tenant to reserve the right to approve the selection of a center's other tenants in order to prevent competing (and much smaller) tenants from taking away customers. That's how much value a well-respected anchor tenant, like an Apple store can bring!
The news broke a few days ago that the Borders Bookstore chain has filed for bankruptcy and will likely see close to 400 stores close down nationwide. Houston will most likely lose it's remaining five Houston Borders locations, which will add to the large amounts of vacant Houston retail space the city has been carrying for years. Not long ago we saw another big box retailer, Circuit City, share a similar fate and some of those vacancies have yet to be filled nationwide.
In Houston and throughout Texas, one of the best franchises around is Texadelphia. The cheesesteaks and queso are ridiculous and the space the franchisee chooses usually fits in with the community and is a great place to grab a bite (see Rice Village, Westheimer, or Cy-Fair).
We've now heard rumors from several sources saying that the Galleria Houston retail space for lease currently occupied by Borders, could be the new location of hot clothing retailer H & M. The news coming out last month that all Borders locations will close nationwide, left questions as to what kind of large big name retail tenant could fill the sizable void in the Galleria left by such a large brand. We may have an answer, although it seems a little early to be sure.
We talk a lot on TheSquareFoot about all kinds of issues that can arise when looking for office and retail space for lease, and we came across this article which does a great job of outlining some key issues specific to leasing restaurant space. Here are some of the points that hit home:
There have been several reports recently that popular neighborhood grocery store Trader Joe's will be making its way to Houston soon, which made many locals who have visited a location in another market quite giddy. The outfit was started on the West Coast in the 1960's, and has built up a popular cult following ever since. Known for having "innovative" and hard to find foods that just so happen to also taste great, Trader Joe's was also known to be somewhat of a pioneer in its marketing efforts - putting out a newsletter in the 70's mainly about the wines and foods that were sold at the store, as well as having a line of private label products.
Recently we took a break from our efforts of bringing efficiency and transparency to Houston small businesses and entrepreneurs who were looking for space for their business. We ate at Sushi Pop located across from Memorial City Mall on I-10 and Bunker Hill because we had heard good things, and knew it was owned by the same group as Azuma and Uptown sushi. The sushi was delicious but we were surprised by the fantastic build-out and retail space. The inside was meticulously decorated and felt open and inviting. It is usually difficult to find a reasonably priced sushi retail establishments in Houston, which has awesome food and also great restaurant space, but Sushi Pop has our seal of approval!
One of our Houston retail brokers, Lance Gillam of UCR moodyrambin PAGE, was quoted in GlobeSt yesterday talking about current trends in Houston retail space leasing. It is interesting to see the dichotomy between class A retail space--where there can often be a waiting list--and class B and C space where vacancies abound.
Think companies based in retail space for lease in a shopping center are always relying heavily on walk-in traffic? Think again. 2nd MD, a web based health care service that allows users to have face to face video consultations with medical specialists, is currently located in the shopping center at 2538 Briar Ridge Drive, Houston TX 77057 just west of the Galleria.
For 20 years, Houston's Town & Country Mall went through alternating periods of boom and bust, before finally closing in the mid-2000s. Since being torn down and replaced by the CityCentre shopping mall in 2009, the area has undergone a resurgence, led in part by the availability of retail and office space for lease.
Houston's economic success is thought to be attributable in large part to its energy industry, but when any economy grows 8.6 percent in one year, there must be many other factors responsible for those gains.
All businesses new to Houston require at least two vital resources to thrive - an ideal retail or Houston office lease and a deep talent pool to draw from as new jobs are created.
Houston is one of the largest cities in the United States and is also an anchor to one of its largest metropolitan areas, with its suburbs expanding well beyond the Downtown Houston area. This allows business owners an abundance of opportunities to grow into new Houston retail space for lease.
When choosing a Houston retail space for lease, a company first needs to answer one question about itself - is it a destination location or will it require a high volume of foot traffic (and random walk-ins) to succeed? According to Yahoo contributor S.H. Wallick, the answer to this question will determine whether a business needs to position itself in a high visibility area.
At 2066 Crist Drive, in Los Altos, California, a nondescript ranch home still stands in a suburban neighborhood not unlike many others across the country. For technology enthusiasts, though, the home is their mecca - it is where Steve Jobs and Steve Wozniak toiled for countless hours, eventually pioneering the first Apple computer.
Frozen yogurt hub Pinkberry has opened its third Houston retail space, this time in the Highland Village area just inside the Interstate 610 loop.
New and old unite in the Upper Kirby area of Houston - for every new mixed-use development that springs up, the region's historic neighborhoods have maintained themselves, acting as a sanctuary away from the bustle of other sections of town.
For a time, businesses that acquired Houston retail space for lease did so without much competition and benefited from the city's relatively unnoticed rebound from the recession.
Not every Houston retail space for rent has the benefit of thousands of square footage. Often, business owners need to make due with what they have, and the less square footage exists, the more pressure exists to maximize the space.
The combination of Halloween and Christmas help make this time of the year fairly profitable for temporary retail space. In many cases, an ideal scenario would be for retailers to remain open only during the times when their sales are highest, and then close up shop when they aren't.