There’s a term Bob Young likes to use when discussing two nearby shopping centers:
“Coop-etition,” says Young, executive managing director of Dallas-based real estate firm The Weitzman Group. “I should have trademarked this,” he quips.
That’s how Young expects the Alamo Drafthouse-anchored Skillman Abrams Shopping Center redevelopment will interact with the Lake Highlands Town Center development a mile up the road.
“It’s going to be complementary while being competitive,” Young says. Both centers taking off around the same time “brings a level of current interest and current opportunity to a given trade area.”
The two centers won’t necessarily be fighting for the same tenants, says Lake Highlands resident Ryan Fuqua, senior associate with The Weitzman Group.
“It’s going to come down to economics,” he says.
The rents that the under construction, Sprouts-anchored Town Center will charge will be too high for most start-up mom-and-pops, for example.
“Artistik Edge is a single-owner but also an experienced operator whose been in Lake Highlands for a while,” Fuqua says. “Other proven concepts could happen” at the Town Center, he says, but he expects to see most other locally-owned businesses to flock to Skillman Abrams, where “I don’t think they can command those high rents, even with an Alamo there.”
While Skillman-Abrams is “ripe for quick-serve restaurants and services coming in,” Fuqua says, it probably won’t attract “soft goods,” or clothing stores, which he thinks will be “dominated by the Town Center because of nicer walkability.”
The old Tom Thumb shopping center “is still going to be a grocery parking lot, not like the Town Center where you can go from building to building to building.”
Before Lake Highlanders start anticipating a neighborhood Gap, however, Lake Highlands Town Center developer Bill Rafkin shuts down that idea.
“We’ve contacted them and they’ve said no,” Rafkin told us in a recent interview. Compared to Preston Royal, Timbercreek, NorthPark, “there’s not enough traffic for clothing retailers.” There could be some interesting retailers at the intersection of Wildcat Way and Wedgwood, however. Original plans called for retail at the base on the apartments on the east side of Wildcat Way, and though those plans have changed, Rafkin says he will have a few live-work units at the southern end near The Haven apartments, where artists and retailers “ostensibly have a shop on first floor and live on the second floor.”
Restaurants seem to be the main focus for both Rafkin and Skillman-Abrams Shopping Center broker Mark Hajdu. In addition to Starbucks, Rafkin tells us that he is in discussions with Mexican, Italian, burger, seafood and dessert concepts, mostly regional restaurants rather than national chains. Likewise, Hajdu says, “We’re talking to a million different tenants from Rudy’s to El Fenix to a pizza concept to an Asian fusion concept. We have more interest than we have space.”
So yes, “I would say some competition for tenants,” Rafkin says, even though the two will be very different shopping centers — one with new construction, anchored by Sprouts with a built-in population of 500-plus apartments and townhomes; the other urban infill anchored by an arthouse theater.
Skillman-Abrams has a winning combination on its hands, Young says.
“In retail real estate today, the most active, the hottest kind of category is food and entertainment,” he says. “If you look at shopping centers around the marketplace today, there are more food offerings than ever before. They cluster and bring people in.”
Rafkin says he has talked to theaters, but industry rules won’t let them screen a movie within 2 or 3 miles of a competitor, “so Lake Highlands Town Center doesn’t make sense for major theaters.” As for arthouses like Alamo Drafthouse, Rafkin says he has “reached out to them all,” but “a lot of the arthouses don’t go into a brand new buildings, they go into repurposed buildings. We have to build a special purpose building and they can’t afford to pay those rents.”
No takers yet, he says, because the dirt is still turning.
“A lot of people are saying, ‘Let’s wait and see,’ ” Rafkin says.