BELLAIRE, Texas — A 68-year-old shopping center shaded by large, mature oak trees is about to be demolished and rebuilt.
The Bellaire Town Center, a two-story center with a minimal setback from South Rice Avenue, still carries the character of a mid-20th-century retail property. Its owner, SDI Realty Advisors, plans to replace the existing 37,000-square-foot center with a new 72,000-square-foot development.
Several long-standing tenants say they would prefer to renovate and remain in their current spaces, but SDI believes a larger, modernized project better serves the site. “Our intention is to stay, but it’s a matter of negotiations with the landlord,” says Gary Cunningham, who has run Auntie Pasto’s restaurant in the center for 27 years. “New space is attractive, but the costs will be high.”
Lease rates in the new development are expected to start at $42–$46 per square foot for first-floor spaces and around $30 per square foot for second-floor space.
Bellaire Town Center sits on Bellaire Boulevard within the city of Bellaire, an area with strong retail demographics. The city is home to many affluent residents living in high-value homes, making the location attractive to retailers.
Some current tenants have already committed to the new project. Costa Brava Bistro at 5115 Bellaire and Lemongrass at 5109 Bellaire will relocate into one of three new buildings planned for the site, with construction slated to begin later this year. “Our customers know where to find us here,” says Chef Srifah Vorarittinapa of Lemongrass, which opened in 2004.Co-owners Angeles Dueñas and Kitty Bailey of Costa Brava Bistro announced their participation in the redevelopment.
SDI Realty Advisors owns the original center, which was built in 1949 by the William G. Farrington firm. Around the same era, the local school district completed completion of Pershing Junior High nearby — a facility that was later demolished and replaced with a new school.
Throughout most of its history, a bank has anchored Bellaire Town Center. The anchor spot has changed hands several times: First State Bank of Bellaire, First International Bank in the 1970s, NCNB, NationsBank, Bank of America, and Community National Bank, which merged with Prosperity Bank in 2012. No bank tenant has been announced yet for the new center.
The new development will be marketed and leased by Edge Realty Partners. Phase I includes a 17,000-square-foot building, with Phase II expected to open in fall 2018. The first phase was designed to accommodate existing tenants with minimal disruption during the transition.
Edge Principal Josh Jacobs and Senior Associate Lauren Heimann are handling leasing. “We have had inquiries to fill three times the space we’ll have,” Heimann says, reflecting strong demand for quality neighborhood retail space.
Rising rents are a broader market trend affecting retailers across the city. “They are up,” says Jason Gaines, senior vice president of retail for NAI Partners. “We’ve seen rents move 5–10 percent compared with this time last year.” Increasing rents and evolving consumer habits are putting pressure on some long-term tenants.
One example is the 900-square-foot Christian Science Reading Room, which has operated in Bellaire Town Center for more than 26 years and now faces a significant rent increase. “We were one of the first to move in,” says Jo Dreves. “We were already here when everyone was doing their build-outs.”
Construction at Bellaire Town Center is now underway. The tenant mix in the new center will change, and it remains to be seen how the redevelopment will affect the shopping center’s iconic oak trees.
June 19, 2017 Realty News Report Copyright 2017