new development vs. top retail establishment: CBRE’s strategy for winning at property leasing against all odds

Market StreetThe Woodlands, TXCategory: Property Leasing, Urban

Challenge

The Woodlands Corporation in The Woodlands, Texas, had unsuccessfully attempted to develop a lifestyle shopping center that supported the community’s booming residential base for two years when CBRE got involved.

Seeing unlimited potential for retail development in this high-income area, regardless of the competition with a big mall, CBRE introduced The Woodlands Corporation leaders to Terry Montesi at Trademark Property. His team put together financing to get the property under contract and pulled in a best-in-class architect to begin the design process. CBRE was involved from the beginning in a collaborative effort with the Trademark team to develop plans for a successful lifestyle center at The Woodlands.

The biggest challenge to the leasing effort initially was gaining credibility with the targeted retailers. The adjacent mall was a staple retail destination in the Houston area and it sensed competition in this concept. The mall announced a lifestyle appendage to their property at the same time and actively used their significant national and local leverage to pursue the same retailers and restaurants.

Solution

Learning the Game

Because the concept of a lifestyle center was still relatively new, the first step was touring other successful properties nationally to see what worked and what didn’t. The team approached the project with an open mind, taking time to learn and research in order to create a successful project.

A Designed Collaboration

Next the architects facilitated a design charrette with everyone at the table to crystalize the vision for the center. Because the strategy session included the diverse perspectives of every key stakeholder, the process resulted in final designs that were based almost entirely on the original sketches developed in the charrette.

A Competitive Leasing Experience

With the concept firmly in place, CBRE developed a merchandizing plan and hit the ground leasing the property.

To combat the extensive competition, CBRE and the expanded leasing team first identified key distinctive anchor tenants and aggressively focused leasing efforts on those brands to spark leasing for the rest of the center. The first crucial success was adapting the plans to accommodate a best-in-class HEB grocery store designed as a hybrid of its traditional grocery and luxury Central Market concepts. The next piece fell into place when the team landed the only combination Tommy Bahama store/restaurant location in Texas.

Results

The project opened with an appealing mix of top-tier brands earning national awards for design. Since the initial development, the property has gone through several evolutions, including facility improvements and releasing efforts.

  • Today the project is 98% leased commanding some of the highest rents in the area.
  •  Luxury brands such as Kate Spade, Tiffany & Co., Lululemon and Sur la Table attract shoppers from a broad geographic area.
  • The true measure of success; however, is the central role Market Street has within The Woodlands community. It has become a center of activity and the default location for parades, ceremonies, holiday festivities, runs and other community events.

Lessons Learned

  • Developing a new property with an open mind and ability to extract ideas and information from a group of knowledgeable professionals was critical to the success of this property.
  • In the face of extreme competition, it is critical to offer a compelling vision to which others can understand and relate.
  • The willing collaboration of talented parties with unique perspectives results in a better end product.
  • GLA: 560,000 sf
  • Year: 2006
  • Retailers: Tiffany and Co., Brooks Brothers, J. Crew, Lululemon, Vineyard Vines, Sur la Table, Kate Spade, Tumi, Z. Gallerie, Tommy Bahama, Sunglass Hut, Eddie Bauer
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