Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/122387
a store, but also for its warehouse and offices. Another online retailer, Blinds. com, had eyed the site too, says Jamie Weaver, who handled the sale for Baker Katz. "We'd been thinking retail only, but with office rates in the mid-$20s per square foot and retail still in the midteens, the deal made sense," he said. In Houston's I-10 corridor, investor Hicks Ventures got creative, refashioning the 131,000-square-foot former Great Indoors building it bought into Block 10 West Office Park, which will contain a newly built, 80,000-square-foot second level of office space, a choice facilitated by the building's unusually high ceiling, according to Weaver. Texas Children's Hospital took a vacated Borders near Rice University, in Houston's affluent River Oaks community, with beauty retailer Ulta taking over the first level. Four big-box spaces once held by Rice Epicurean Markets were leased to Fresh Market, which is planning late-2013 openings for all of them. Fresh Market will itself occupy only about half the space and sublease the rest, according to Weaver. Though owners of megaboxes — 80,000 square feet or larger — have greater leasing challenges than others, even those spaces are filling steadily. The demise of the big box has obviously been greatly exaggerated, says Garrick Brown, research director at ChainLinks Retail Advisors. And though the owners of so-called megaboxes — 80,000 square feet or larger — have greater leasing challenges than others, even those larger spaces are refilling steadily, he notes in a report titled The Big Box Theory: Boxes Aren't Dead, Just Shrinking. As the housing market improves, retailers are returning to expansion mode and the more compact "ju- nior boxes" show the greatest promise, Brown says, because most chains have downsized their store footprints. The pool of retail space users in the 20,000to-40,000 square-foot range is about 15 times larger than that of spaces 40,000 square feet or greater, Brown says. Even the bulky Mervyns boxes are moving. Los Angeles–based Wilson Commercial Real Estate was hired by Inland Western Real Estate in 2008 to lease 22 former Mervyns stores in excess of 70,000 square feet, according to Scott Burns, Wilson Commercial's president. By May of last year, 15 of those were leased and an additional four had been sold. New occupants include Burlington Coat Factory, Hobby Lobby, Kohl's, Marshalls, 24-hour Fitness and WinCo Foods. Opportunistic retailers like Burlington Coat Factory and Hobby Lobby, which have been unable to afford rents of $18 to $24 per square foot, have been able to expand in California, thanks to discounted deals at vacated Mervyns spaces, according to Donald MacLellan, senior managing partner of Irvine, Calif.–based Faris Lee LA Fitness signed A LeAse to buiLd A 45,000-squAre-Foot workout center At the Former borders in dALLAs' oLd town shopping center. 214 SCT / M a y 2 0 1 3