in oak cliff?

story by keri Mitchell

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!

What are the next retail trends? Should we hold out hope for a Market Street?

Trader Joes’s? Find answers at oakcliff. 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.

Caf Brazil

cafebrazil.com

FIRST RESTAURANT Lakewood (now demolished), December 1991

TOTAL RESTAURANTS 10

IN OUR NEIGHBORHOOD Lower Bishop Arts, Bishop and Davis

COMPANY PHILOSOPHY “History has shown we’ve been successful in taking over previous restaurant locations,” Café Brazil CEO Brant Wood says. “I think people feel more comfortable in established buildings in established neighborhoods.” This means the layout varies from one location to the next, with each restaurant featuring local artists’ work in urban locations and schoolchildren’s art in suburban locations. Menus, however, are the same across the board. “Most restaurants are open for two meals,” Wood says. “We’re open breakfast, lunch, dinner and late nights, and we have a broad menu to meet the needs of both the suburban housewife and urban late night fans.”

EXPANSION PLANS The most recent Café Brazil opened in Oak Cliff in July 2008, right as the recession hit. The company hasn’t opened any other locations since then, but “never stopped looking,” Wood says. Most of its current requests for new locations are coming from Fort Worth and Denton, and Café Brazil is interested in spots near college campuses because its existing locations near colleges perform well. Most Café Brazil restaurants are in the city of Dallas, so any future Dallas locations “would have to be more strategic, but I certainly wouldn’t say that we’re finished.”

The company’s eventual goal is to take the concept outside DallasFort Worth to growing fan bases in Austin, Houston or Oklahoma City — “people within a Southwest Airlines flight of here,” Wood says.

LOOKING FOR A NEW CAREER?

Are you ready to find a fulfilling career that would provide unlimited earning potential and the opportunity to have a flexible work schedule? You should consider a career in real estate an exciting and dynamic profession that makes difference In

If this sounds interesting to you, Call Mark Kohutek at 214-217-5735. for a confidential interview.