HOUSTON – Patty Bender, a longtime Houston executive in the shopping center industry, joined Vista Private Equity Group as a partner after a 33-year career with Weingarten Realty Investors. Vista Equities Group is part of the Vista Companies, a Houston-based real estate services organization led by veteran Texas developer Woody Mann. Vista focuses on developing new properties and acquiring income-producing assets.
During her tenure at the Houston-based Weingarten REIT, Bender oversaw projects such as the Village Arcade near Rice University and the redevelopment of River Oaks Shopping Center. She managed the development and operations of roughly 300 Weingarten shopping centers, carrying responsibility for net income across the portfolio and directing transactions involving existing assets, redevelopments, and new developments. Her team handled anchor and shop tenant replacements, re-merchandising, and repositioning assets to maximize cash flow.
Bender also serves as a guest lecturer at Rice University’s Jesse H. Jones Graduate School of Business and previously served on the Board of Uptown Houston, where she chaired the Uptown Marketing Committee.
She recently took time from her responsibilities at Vista to speak with Realty News Report about current trends in Houston retail.
Retail Market Outlook
Realty News Report: It appears the Houston retail center market weathered the downturn in oil prices and a softening economy. What lies ahead for Houston shopping centers in 2017?
Bender: I expect a strong emphasis on urban renewal and infill. At a recent Urban Land Institute panel I moderated, HEB openly discussed its willingness to adopt smaller footprints and multi-level formats. Whole Foods and Sprouts share similar interests. There is still strong demand for grocery and drugstore sites in and around Rice University, River Oaks, Montrose, Midtown, Bellaire, and other densely populated, higher-income neighborhoods. Once a strong anchor exists in those urban areas, it often reveals underserved needs—specialty services like high-quality cosmetic dentistry, more service-oriented retailers, and upscale restaurants.
On the flip side, landlords may find it increasingly difficult to secure fashion retailers in some centers. While health-oriented retailers—yoga studios, boutique fitness, and wellness shops—remain sought after, home décor and apparel categories have slowed, and some full-service restaurants are feeling pressure. Wine and liquor sales, for example, have been impacted by the energy sector slowdown.
Construction and Development
Realty News Report: Much retail space was built in 2016. Will construction taper off in 2017?
Bender: Construction will likely ease as newly completed centers lease up, but opportunities will persist. Expect continued development along the Grand Parkway and suburban infill in areas like Sugar Land and Katy. At the same time, smaller projects will appear in urban neighborhoods such as the Heights, Memorial Heights, Montrose, Garden Oaks, the I-10 corridor inside the Loop, Midtown, and EaDo.
LaCenterra at Cinco Ranch
Realty News Report: Vista recently announced it will start the final phase of LaCenterra at Cinco Ranch on the Grand Parkway in West Houston. What has made LaCenterra successful?
Bender: LaCenterra has become a premier lifestyle center for Cinco Ranch residents—a comprehensive destination for fashion, entertainment, and dining, offering more than a dozen restaurants. We are beginning Phase II of that Sugar Land project, with a planned opening in 2019 and interest from three nationally known anchor tenants.
Downtown Retail and Dining
Realty News Report: Where does the core downtown customer go?
Bender: Developers such as Midway and Colvill are focusing on GreenStreet with a mix of strong restaurants, fitness concepts, and soft-goods retailers to capture the downtown market.
New Retailers Entering Houston
Realty News Report: Are any new retailers moving into Houston?
Bender: Several national and international retailers are actively expanding here. Lidl, the large European grocery chain, is aggressively securing land to open numerous Texas stores and plans a multi-year rollout. Amazon is scouting sites for its grocery concepts. Also notable is 85 Degrees Bakery, a fast-growing Asian bakery chain with California roots that’s seeking locations both inside the Loop and in suburban areas.
Realty News Report: So Lidl will have a major presence here?
Bender: I believe Lidl will establish a meaningful presence in Houston, though the rollout will likely take several years to complete.
Restaurant Scene
Realty News Report: Houston always seems to get new restaurants. What’s happening in the restaurant industry?
Bender: The market remains dynamic. For example, Uncle Julio’s—well known in Dallas—opened in Katy with a strong team and an imaginative menu. EaDo is seeing a cluster of new concepts: Rodeo Goat is slated for a summer opening on St. Emanuel near the East Village project, and Agricole Hospitality is planning multiple concepts within a single space in East Village, targeting a summer or fall debut. Overall, Houston continues to attract diverse and innovative restaurant operators.
Emerging Retail Trends
Realty News Report: Are there other retail trends to watch?
Bender: Health, wellness, and beauty are major drivers. Concepts like dry bars, lash bars, specialized beauty studios, yoga, kickboxing, and other boutique fitness formats are thriving. The beauty and wellness segments are increasingly fragmenting into niche offerings, and larger specialty fitness brands are expanding into multiple submarkets—Big Yoga, for instance, has a Heights location and is exploring other areas such as the Woodlands.
Jan 28, 2017 Realty News Report Copyright 2017