THE HEIGHTS, Texas – The sale of a 20,500 square foot warehouse building at the southwest corner of N. Shepherd and W. 18th — expected to be transformed into retail — is the latest in a series of adaptive reuse developments in the Houston’s trendy Heights, which lies just northwest of downtown.
“The sale says what by now everyone knows – the Heights is hot,” says Mark Davis, president of Davis Commercial, which specializes in inner city retail and handled the transaction. “It seems like about a year ago someone flipped a switch and now everyone wants to be there. In the North Shepherd area, where a lot of new redevelopment is occurring, Hunky Dory/Bernadine’s was a real catalyst. Ryan Neyland of our office just leased up the redevelopment of the southwest corner of Shepherd and 19th with Cane Rosso, who’s owner says their sales are “insane” and is going to lease the balance of the shopping center to a dessert concept that they will operate as well.”
Davis Commercial is leasing the retail center at the northeast corner of Shepherd and 24th — the site of the former Wyatt Cafeteria that was acquired by MFT properties. The 6,000 square foot building, adjacent to the shuttered Fiesta (rumored to become a future HEB) is being redeveloped. MFT properties also purchased the former Post Office at Yale and 11th, and a retail redevelopment is in the works there as well.
“We are seeing all types of buildings being converted to retail in the Heights – warehouse, residential, etc.,” said Davis. “One main reason is that land is getting expensive with commercial lots averaging $50-$60 per square foot and up. If there is an existing structure on a property, it can make the economics work better for the developer. Plus, often times using these old structures allows the developer to retain the character and vibe of the area, which we love to see.”
The Heights a neighborhood that was created in the early 1900s and it was actually a stand-alone municipality before it was annexed by the City of Houston in 1919. It was an early-day streetcar community, inhabited by commuters who worked in downtown Houston via the streetcar.
Historic homes in The Heights have been restored and home prices have risen considerably in recent years with the average home price at $719,000, according to the Houston Association of Realtors. Home builders have been actively adding new houses priced over $1 million and up.
The upscale housing activity has embellished the demographics and buying power in The Heights.
Davis says The Heights area has seen zero effect from the energy slowdown that has impacted office markets. “It is still in high demand due to convenient location, uniqueness, and walkability – things you typically can’t find together in most of Houston,” he adds. “There are lots of restaurants are coming and that is the hottest category for sure, but there is room for more grocery, clothing, and fitness.”
Alan Hasssenflu’s Fidelis Realty Partners, Ltd. is developing the Yale Marketplace, a proposed retail projects in the Heights area expected to be anchored by the 365 by Whole Foods store — the grocer’s new “value-oriented” store targeted for millennials. Hassenflu notes the property is expected be the first in Houston for the 365 concept and one of the first in the country. Yale Marketplace is expected to commence construction on or before April 2017, and open in the first quarter of 2018.
In addition, the 40,000-square-foot Heights Mercantile, a low-rise retail project of six structures at Heights Boulevard and 7th and Yale streets has begun construction with shops, restaurants and a fitness studio. It is a project of Heights Mercantile developers of real estate entrepreneurs Steve Radom and Evan Katz.
Davis Commercial recently leased a former residence at 3423 White Oak off Heights Boulevard to Darling Way, described as a a “unique assortment of romantic treasures that provide momentum for greater intimacy.” Darling Way’s mission is to “bring back the ideal of classic romance,” says Davis.
Last year, Edwin Cabaniss acquired the former Heights Theatre and intends to open a live music venue based on his Kessler Theatre concept in Dallas. “It will open around October, and Edwin does a great job of getting some of the coolest local, regional, and national music acts,” says Davis. “He loved the historic nature of the former theater and well as the feel of the Heights.”
718 W. 18th is an example of how hot the neighborhood is and the lack of available locations. Davis Commercial’s Barrett Von Blon, who specializes in the Heights, contacted the owner – Sol Eisenbaum — because numerous clients were looking for locations in the area. After lots of persistence and follow up by Barrett, the seller said he would consider selling. Von Blon brought the property to a client, Developer Steve Radom, who agreed to buy it immediately.
“Steve is planning a redevelopment on the property,” says Davis. “He has not finalized his plans, but Steve is a great “inside the loop” developer with a wonderful aesthetic who always keeps the character of the neighborhood intact. I know it will be something special.”
The site was previously home to Airmaker Inc. and consisted of a 20,529 square foot metal office/warehouse constructed in the early 1970s when it was utilized by Quality Service Metals, a metal fabricating shop. Owner Joel Friedel decided to remove the center section of the building and offer for sale two separate buildings. In 1986, Sol Eisenbaum and Airmaker Air Conditioning and Heating purchased the property. Included in the purchase was a neighborhood picnic area and a 3-hole golf course built on a replication of the State of Texas, Davis notes. Other tenants included Alamo Siding and Roofing, Southwest Surplus and Savvi Office Furniture.
August 18, 2016 Realty News Report Copyright 2016