TEXAS SNAPSHOT, AUGUST 2011

Rio Grande Valley Retail Market

The Rio Grande Valley, now doing business as Rio South Texas, offers many choices for retailers. Rio South Texas comprises the cities of Brownsville, San Benito, Harlingen (Cameron County), Edinburg, McAllen, Mission, Mercedes, Pharr and Weslaco (Hidalgo County).

BROWNSVILLE

Brownsville has welcomed five CVS/pharmacy locations: the first on Highway 48, the second at the intersection of Highway 48 and Ruben Torres, the third at the intersection of Alton Gloor and Pablo Kisel, the fourth on Ruben Torres and the fifth at the intersection of Boca Chica and Central Boulevard.

Gold’s Gym is opening its second location on Boca Chica Boulevard with 19,000 square feet at Brownsville Plaza. Feldman’s Liquor opened a 10,000-square-foot retail store at Las Tiendas. An announcement of Macy’s coming to Brownsville along with numerous other stores will occur shortly.

Retail sales in Brownsville decreased 6 percent since 2006 from $1.78 billion to $1.67 billion.

HARLINGEN

Harlingen will soon be home to the Bass Pro Shops’ 57th location, open ing this fall. The site is part of a large development know as Cameron Crossing shopping center. It is interesting to note that the population within a 60-mile radius of Harlingen is greater than the population within 60 miles San Antonio’s Bass Pro Shops or the Cabelas in Buda, Texas. City officials signed a 20-year lease with Bass Pro Shops setting the stage for a large retail shopping center north of the Expressway 77/83 interchange. This development is immediately north of Simon Properties’ Valle Vista Mall, which is home to a score of other major retail outlets including Dillard's, Forever 21, JC Penney, Sears and Big Lots. It’s also home to 70 additional stores including Victoria's Secret, Aeropostale, Auntie Anne’s Bath & Body Works, Foot Locker, GameStop, General Nutrition Center, New York & Company, Rack Room Shoes, Hot Topic, Express Men, Sam Goody, Kay Jewelers, Charlotte Russe, Hallmark and Coach. Retail sales in Harlingen have increased 5 percent since 2006 from $920 million to $970 million.

EDINBURG

Positive signs for the region continue in 2011 as several big box users are return to the market. First Hartford, the Connecticut-based developer behind The Shoppes at Rio Grande Valley has announced plans to build a 90,000-square-foot expansion next to JC Penney in Edinburg. Land has been sold to McDonald’s for a restaurant along Trenton Road and an expansion of the center west of JC Penney including Anna’s Linens, GNC and Petco will occupy the new space, which should be open for business during 2012. With the expansion, the Shoppes will have 428,000 square feet of retail space. Walmart Super Center, Lowe’s Home Improvement Warehouse and a host of other retailers also have locations in Edinburg. Retail sales in Edinburg have increased 31 percent since 2006 from $612.8 million to $799.8 million.

MCALLEN

In McAllen, the second Hobby Lobby is under construction at Palms Crossing. Palms Crossing is the gateway to the 165,000-square-foot convention center and home to Bealls, DSW, Barnes & Noble, Babies "R" Us, Sports Authority, Guitar Center, Cavender’s Boot City, Best Buy and many more. The second Sam’s Club in McAllen is scheduled to be open in 2012 at the Cielo Realty Partners development in North McAllen. Sam’s Club will anchor the development, called Valencia Marketplace. The site is more than 40 acres so it will attract a number of other major retail and restaurant users. La Plaza Mall, the 1.2 million-square-foot retail center is the jewel in McAllen retail crown. Anchored by Macy’s, Dillard’s, JC Penney and Sears, the center may be expanding in 2012 by 160,000 square feet. Retail sales in McAllen decreased 15 percent since 2006 from $3.46 billion to $2.93 billion.

MERCEDES

The City of Mercedes also caters to a consumer market of more than 2.3 million within a 50-mile radius and 10 million within a 200 mile radius. Chelsea Outlet center is located there with over 152 stores including Adidas, Ann Taylor, Brooks Brothers, Casual Male XL, Cole Haan, Eddie Bauer, Hugo Boss, Jones of New York, Kenneth Cole, New York New York, OshKosh B'gosh, Polo Ralph Lauren, Rue 21, Off 5th Saks Fifth Avenue Outlet, Skechers, The Children’s Place and Tommy Hilfiger. Retail sales in Mercedes increased 77 percent from $150.5 million to $266.9 million between 2006 and 2010.

WESLACO

Centrally located with a 10-mile trade area radius of more than 200,000 people, Weslaco is the site of Valley Crossing Shopping Center with almost 350,000 square feet currently constructed and pad sites are still available. Lowe’s Home Improvement Warehouse, JC Penney and Academy are the anchors of the center with Petco soon to break ground. Olive Garden is the first restaurant to open its doors on the site with others planned in the future for this SDI Realty Development project located on Expressway 83. Retail sales in Weslaco increased 14 percent from $577 million to $660 million between 2006 and 2010.

FOOD AND BEVERAGES IN RIO SOUTH TEXAS

A recent survey of the top emerging restaurant markets in the United States conducted by QSR magazine and Pitney Bowes Business Insight ranked the top 40 cities for expansion. McAllen ranked No. 1 and Brownsville No. 2 for medium markets.

Recent additions to the growing cluster of restaurants includes Pappadeaux’s, Smash Burger, Five Guy’s Burger and Fries, Cracker Barrel, P.F. Chang’s China Bistro, BJ’s Brew House, Mimi’s Cheddars, Longhorn Steakhouse, Texadelphia, Poncho’s and Buffalo Wild Wings, just to mention a few. Mexican-owned family restaurants are relocating in the Valley. These include La Mansion del Prado, Arturo’s and Cabrito El Pastor.

— Michael Blum is a partner and managing broker of NAI Rio Grande Valley.

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