By Paul Layne, Executive Vice President, Master Planned Communities for The Howard Hughes Corporation
Retail and restaurant activity is strong in Houston. The Woodlands, an award-winning master planned community located 27 miles north of downtown Houston, has defied the negative impact of the oil and gas market by staying extremely solid with high occupancy and strong rents. Both retail and restaurants have seen robust growth.
"Despite reports of Houston’s economic slowdown, the retail market isn’t fazed by the dropping oil prices,” says CBRE’s Houston retail research report for third quarter 2015. "In fact, construction has increased, national retailers are bullish on the Bayou City and five years of the strongest population gains in the nation are driving healthy retail growth.”
Retail occupancy in the Far North sector, including The Woodlands, remains at approximately 94 percent for the third quarter of 2015, according to CBRE.
While traffic in the Houston area continues to become congested, suburban cities such as The Woodlands offer shoppers and diners almost all of their retail needs within the walls of the community. Residents are finding no reason to leave.
Retail in Houston and The Woodlands is limited by supply. As quickly as construction begins on new retail sites, preleasing occurs.
"Fortunately, there is currently 2.6 million square feet of retail space under construction, but only 25 percent is available as 75 percent is pre-leased,” says Colliers International in its third-quarter research and forecast report for Houston. "Close to 400,000 square feet of new inventory delivered during the third quarter, and 83 percent of the new product is preleased.”
The Woodlands Development Co., a wholly owned subsidiary of The Howard Hughes Corp., is adding more retail into the community to help alleviate the limited supply. For example, Whole Foods Market, specialty boutiques and additional retailers have opened in Hughes Landing, a 66-acre mixed-use development on Lake Woodlands.
Hughes Landing is home to Restaurant Row, a unique row of approximately 50,000 square feet of dining options, a significant amount of square footage dedicated to restaurants. The newly opened Embassy Suites by Hilton The Woodlands at Hughes Landing features E’Terie Restaurant and Bar.
The Woodlands Waterway Square District continues to grow as a retail and entertainment destination. Restaurants have been added to The Waterway, including an 8,000-square-foot Kona Grill and Cyclone Anaya’s Mexican Kitchen, along with retail and The Westin The Woodlands, a new 13-story hotel.
Anchored by H-E-B Creekside and Walgreens, the new Creekside Park Village Center continues to add a mix of retailers and will soon include additional pad sites.
"Retail in The Woodlands continues to be very healthy and appealing to retailers and restaurant operators despite the economy,” says Rip Reynolds, director of leasing and commercial land for The Howard Hughes Corp. "The Woodlands is very active and typically is a highly desired trade area when a new retailer or restaurant is looking to enter the Houston market.”
Also, Howard Hughes is beginning to add retail to Bridgeland, its development in Cypress. Lakeland Village Center broke ground in 2015 and is anchored by CVS/pharmacy. Retail development will continue in this area with the Grand Parkway offering easy access through Bridgeland.
The Woodlands is one of the only Houston submarkets outside of the Galleria to have luxury brands and sectors that continue to grow. Outside of the Galleria, the only Houston-area locations for Tiffany & Co. and Nordstrom are in The Woodlands. Ferrari of Houston also selected The Woodlands Waterway Square District as its first location outside of the city limits.
Many well-known brands opened their first Houston-area locations in The Woodlands, including Trader Joe’s in Indian Springs; Johnny Was and Trina Turk at Market Street-The Woodlands; 18|8 Fine Men’s Salons in Hughes Landing; and Tyler’s. Morton’s Grille, located at 25 Waterway Ave. in The Woodlands Waterway Square District, also made its entrance into the Houston market in The Woodlands.
When retailers decide to open flagship stores in the Houston market, many choose The Woodlands as their only suburban location. Del Frisco’s Grille, Fogo de Chão Brazilian Steakhouse and the future Truluck’s each opened their first suburban locations in the Houston area at Restaurant Row in Hughes Landing.
In addition to retail, The Woodlands provides a true live, work, play and learn environment. You don’t have to leave The Woodlands to obtain Class A office space, a wide variety of new homes and several four-year university options along with a community college.
Fitness options in The Woodlands include Villa Sport, seven championship golf courses, over 100 parks and more than 200 miles of hike-and-bike trails. The new office buildings in Hughes Landing offer fitness areas as well.
The Woodlands now also has numerous healthcare options. It is home to Memorial Hermann The Woodlands Hospital, CHI St. Luke’s Health – The Woodlands Hospital and St. Luke’s Lakeside Hospital. Houston Methodist-The Woodlands Hospital and Texas Children’s Hospital The Woodlands are under development. Numerous emergency clinics are also located in the area.
The Woodlands continues to grow its retail and restaurant businesses, offering more choices for residents and visitors for years to come.
This article originally appeared in the March 2016 issue of Texas Real Estate Business.