in lake highlands?

Will they come?

What’s keeping them away?

Can local businesses meet the challenge?

When national companies decide to carve out a niche in Dallas, whether it’s a grocer or restaurant or retailer, they all look in the same place.

“almost 100 percent will start in the Park Cities to Preston Hollow corridor, and then follow the 75 and Tollway corridors, kind of a pie shape up to the north,” says David Shelton of united Commercial realty.

“The main reason for that is demographics. It’s that plain and simple — the highest concentration of population and the highest concentration of incomes in that corridor.”

Commercial real estate folks tend to sound like broken records when talking about the retail formula: a high number of people living in a given area (population density) who have a lot of money to spend (income) and regularly travel near a specific site (traffic counts) equals a successful business.

It’s a formula that works, they say.

“The fact of the matter is that stores have to go where there are people, people, people,” young says. “We’re not in the rocket science business; we’re in the logic business: established dense areas with income.”

For the most successful merchants, he says, “in addition to having a good product and good service, you’ve got to be able to have traffic and predict your traffic.”

Not to mention the herd mentality central to the retail world — most companies follow others like cattle into new markets or even specific properties. This is called “tenant mix”, with discount stores or high-end retailers wanting to be grouped with other companies attracting similar shoppers.

That explains, for the most part, why retailers wind up in some areas of the city and not others. but how do they get here in the first place?

That can be attributed to the sheer buying power of Dallasites. Dallas and Fort Worth combined hold nearly 28 square feet of retail for every person living here — “almost more than Manhattan,” young says, and substantial compared to the national average of roughly 23 square feet per person.

Dallas also lacks barriers that generally deter new companies, says Mike Geisler of Venture Commerical.

There’s More!

Should we hold out hope for a White Castle? Market Street? Burger House? Find answers at lakehighlands. advocatemag.com/ retail.

“It’s an affordable place to buy real estate, affordable construction, easy to find labor and comparatively easy to get through city processes,” he says, adding that the biggest barrier for most companies is competition from those who arrived here first.

as for other companies that should be making Dallas their home, “the list is almost endless,” Shelton says. “There are a lot of folks that probably should be in Dallas that aren’t here, and on the flipside, a lot of people that shouldn’t be in Dallas are here. Dallas-Fort Worth is one of the largest metropolitan areas in the country and will continue to be a top-of-the-list high point for anyone expanding in the retail and restaurant world.”

coveted corporAtions

they may be corporate chains, but these companies know how to make us want them.

hennes & MAUritz (h&M)

first store Västerås, Sweden in 1947 first U.s. store Fifth Avenue, Manhattan, N.Y., in 2000 coMpAny hoMe

Stockholm, Sweden totAl stores

2,000 in 37 countries, including 200 in 27 states closest store to dAllAs Des Peres, Mo. (St. Louis area), 637 miles size of the new northpArK center flAgship store 24,000 square feet, slated to open in the second half of 2011 other flAgship stores in the U.s Only three: Manhattan; Westfield Santa Anita in Arcadia, Calif.; Michigan Avenue in Chicago whAt’s the big deAl? Sought-after by fashionistas on a budget, H&M is widely hailed as the originator of the “fast-fashion” retail format with high-volume merchandise and constantly changing styles. H&M carries both men’s and women’s clothing and accessories, plus maternity and children’s lines. The company does not have online stores in the United States — another reason its storefronts are in high demand. expert opinion “It’s a fashion-forward product for a great price obviously there’s a need and a demand for them, especially in this economy.” —Kent Arnold

“In some respects, I’m surprised they haven’t gotten to Dallas more quickly because Dallas is such a huge fashion market. It’s a European company looking at the whole globe as their market, with moderate expansion in the U.S. as opposed to a fervent pace. One of the reasons we’re all impatient about it is they’re a great retailer.” —MiKe geisler

“If you look at some of the most successful locations they have, they’re urban with high density, meaning a lot of people. Even though their merchandise is not extensive, they still have to do high, high, high volumes. These merchants don’t go anywhere where they think they can’t generate high sales. They will find real estate they can get at relatively low prices in their core markets. The price for a former Macy’s that closed at a mall might turn out to be pretty attractive to an H&M.” robert yoUng

Retailers eyeing the urban core

The tables are turning, and cities are starting to look better than suburbs to retailers. Why?

“Density cures a lot of problems these days,” says Gerald Crump, Weingarten realty central region vice president and director. “retailers are willing to pay more for urban infill sites where they don’t have stores, rather than greenfields.”

Greenfields are massive expanses of undeveloped land, usually on the outskirts of a city or metropolitan area. up until the recession, these areas were hotbeds for new retail developments.

These days, however, the commercial real estate realm is focusing on urban infill — filling vacant spaces in cities rather than constructing new spaces on far-flung vacant land.

It’s not that people have stopped moving to the suburbs; it’s just that they are thinking twice about moving away from urban areas like our neighborhood, and sometimes people are even deciding to move from the outside in. The result is that “everyone is looking inside the loop, because you’ve got a growing density of population. Sometimes everybody wants to go and get part of the urban world — it’s a reversal of how we grew to the ring cities,” young says.

Crump recently attended a conference attended by top retailers, the kinds that typically anchor shopping centers. They asked when new construction would start up again, and Crump’s response was a question: “When are you guys going to pay new development rents?” He already knew the answer: Not until the many vacancies left in the wake of the recession are leased.

These vacancies, sometimes called “second-generation spaces”, are leasing in DallasFort Worth, young says. another switch from the greenfield era is that retailers are no longer limiting themselves to a prototype store that they can plop onto a developing property. One factor that made undeveloped suburbs so enticing to the so-called big-box stores — the Targets and Office Maxes and Old Navys of the world — was the difficulty of finding enough existing real estate for such prototypes in cities. but “all merchants are looking at new formats in this economy, and that’s going to help us lease up the empties,” young says.

One good example is grocery stores. united Commercial realty handled roll-outs for 11 new Sprouts Farmers Market locations and nine aldi’s grocery store locations during the past two years, and both stores “back-filled a lot of old grocery spaces,” COO Jean Smith says.

Target and Kroger have urban formats, he says, and the businesses are looking to move into reemerging urban markets where young singles and empty nesters live. Target’s urban store, called CityTarget, can wedge into spaces as small as 60,000 square feet, Smith says, compared to a typical 85,000-square-foot SuperTarget.

“We don’t need 10 types of ketchup to choose from,” says Kent arnold of Henry S. Miller. “everyone’s getting smarter, and so the 60,000-square-foot store can go into 30,000 square feet — and it is.”

Walmart will be a major player in the urban infill grocery store market. Smith cites statistics that Walmart has grown from 8 percent of the grocery market in 2001 to more than a third of the market today, and the company has plans for an even smaller store than its Neighborhood Market concept.

“They were the first ones to do a supermarket, and they were the first ones to scale back,” arnold says. “They will always be the trendsetter.”

Meet the experts

Kent Arnold, forMer AssistAnt vice president of henry s. Miller retAil division Henry S. Miller was established in 1914, and today is one of the largest independent commercial real estate firms in Texas. The company owns and manages properties such as Preston Royal Shopping Center, Pepper Square Shopping Center at Preston and Belt Line, and Lakeside Village Shopping Center at Central and Walnut Hill.

dAvid shelton, vice president of United coMMerciAl reAlty UrbAn United Commercial Realty manages and leases more than 40 million square feet of retail properties, nationwide, and currently represents more than 100 regional and national retailers and restaurants, including Galleria North, Preston Forest Village and The Shops at Park Lane.

Homegrown Hits

These restaurants have Dallas roots, and now they’re sprouting all over the map.

Purple Cow

purplecowtexas.com

FIRST RESTAURANT Little Rock, Ark., in 1989; opened in Dallas at PrestonRoyal in 1998

TOTAL RESTAURANTS Four: Dallas, Plano, Fort Worth, Allen (the two original Little Rock locations have since been sold)

COMPANYPHILOSOPHY “Usually Purple Cows go into higher-income areas with some office buildings around the location, so we’ll get a nice lunch traffic,” company president Don Lindsley says. The Preston-Royal location is an exception because it’s surrounded mostly by other shops and restaurants. Purple Cow’s claim to fame is being the only restaurant in the world that sells purple Blue Bell ice cream. “It’s made just for us in Brenham,” Lindsley says. The fare and atmosphere are popular among kids and their parents. “We have a kids menu, but our regular menu is basically a giant kids menu,” Lindsley says. “We do serve alcohol, so if mom or dad has had a rough day at the office and needs a glass of wine or an ice cold beer, that might be the deciding factor in them picking us.”

EXPANSION PLANS A new Purple Cow — “the first in a long time,” Lindsley says — opened in March 2010 at The Village of Fairview, a recently developed shopping center in Allen near the outlet shops. “It really is a matter of the owner of the property putting an attractive deal on the table for us,” Lindsley says of potential future locations. In the case of The Village of Fairview, “they pursued us; we didn’t pursue them.” Though the restaurant enjoys its popularity among young families, this market alone “might not be a good thing,” Lindsley says. “We wouldn’t want a bedroom community where mom and dad hop in the car every day and go to work, and we’d be empty every day for lunch.” is a great time to start building raised beds for veggies. The corner brace system makes creating custom beds a snap. Just add your favorite untreated wood to fit any space needed.

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