November 1, 2010
COVER STORY, NOVEMBER 2010
Market Heights, a Direct Development regional retail center located in Harker Heights, has leased approximately 107,000 square feet since the economic decline in 2008. You read that correctly — approximately 107,000 square feet leased since 2008. Most shopping center owners would do anything for those kind of leasing numbers in the past 2 years.
Market Heights is a 650,000-square-foot regional retail center that sits on 82 acres of land near the military base Fort Hood, just outside of Killeen. It has a population of 259,899 within 15 miles with an average household income of $62,000. Since its completion in 2008, it has lost one tenant — Circuit City. It hasn’t faced the decline in the market so many have nationwide during the past 2 years.
“We’ve had no turnover at all,” said Bruce Sifford, president and COO of Direct Development. “Circuit City was lost nationally and we replaced it immediately.”
At a little more than 90 percent leased, Market Heights is anchored by Target and has about 50,000 to 60,000 square feet of retail space left to fill the center. Other tenants include Cinemark, Barnes & Noble, Dick’s Sporting Goods, Bed Bath and Beyond, Old Navy, ULTA, Petco, Compass Trading Co., The Children’s Place, Kirkland’s, Re-Bath, Maurices, Fossum Dental, Sally Beauty, Payless Shoe Source, Dollar Tree, Twin Liquors, Firestone, First National Bank of Texas, Bank of America, Chase Bank and many more.
“There were quality retailers interested in being in this market but there just wasn’t a good opportunity for them,” said David Watson, managing principal of Direct Development. “There wasn’t enough critical mass on any site to allow for the kind of synergy that would exist when retailers like Barnes & Noble, Old Navy, Target, Bed Bath and Beyond call.”
Once the 80 acres of land became available, though, and Direct Development leveraged its relationship with anchor tenant Target, it was a different story.
“Everyone followed Target,” said Watson.
And the shoppers and families from Fort Hood followed those retailers.
“The location is great. The traffic tells it all. People around here call it the mall in Harker Heights,” said Irene Preston, merchandise manager for Barnes & Noble.
For Market Heights, a better location is hard times couldn’t have come along. Fort Hood has 4,600 soldiers and 17,000 on post family members that translates to a $10.8 billion annual impact on the community. And 25 percent of the soldiers stay in the area for retirement.
“In this kind of tsunami environment we’re in, in Texas as well as the nation, it’s been a real bright spot for us and everyone affiliated with it because all the retailers seem to be doing well there,” said Sifford.
As for other regional retail centers without built-in advantages like Fort Hood, Watson says Direct Development just focuses on hard work.
“We’re only commercial retail focused and we only work on regional shopping centers like Market Heights,” said Watson. “We stay very close to the junior anchors and their interests in different markets, communicate daily with prospective tenants and try to maintain activity where we can.”
When the “tsunami” hit, Watson said it delayed ultimate stabilization for many regional shopping centers.
“We’ve had to stay on point, stay focused and develop these centers out as the retailers and restaurants wish or desire. It’s nothing new. It’s just hard work, focus and communication,” said Watson.