COVER STORY, MAY 2012

RETAIL BLISS IN TEXAS
Freedom Crossing at Fort Bliss is beefing up its tenant roster.
John Nelson

Freedom Crossing at Fort Bliss is a bit different than other retail centers, but the El Paso attraction has been successful and is growing in more ways than one.

A customer browses for merchandise in the Apple Store inside Freedom Crossing at Fort Bliss.

The first ever open-air shopping center in a military installation has experienced strong sales among its merchants and eateries since its opening in 2010. During the last few months, Freedom Crossing has enticed a new round of retailers and restaurants to set up shop in the military base, including A’GACI, O’shoes, Texas Roadhouse, Chi Town Barbeque, Things Remembered, Auntie Anne’s, Cinnabon and Old Fort Bliss Cigar.

The center averaged approximately $650 per square foot in 2011, which is well above the national average for malls of $453 per square foot as of February, according to ICSC. Danaria Farris McCoy, director of marketing at ServiceStar Development Co. and Freedom Crossing at Fort Bliss, says the strong performance of existing merchants and the center’s unique setting are alluring for potential businesses.

“This shopping center offers an opportunity for private retailers to come in and get directly in front of the military market,” explains McCoy.

“(The retailers) are very excited about being able to do business in this fashion on a military installation that they’ve never been able to do before,” continues Rena Arnold, leasing director of Army & Air Force Exchange Service (AAFES), which operates The Exchange, one of the anchors of Freedom Crossing.

Also appealing for businesses is the activity within Fort Bliss and its growing population. During the past 5 years, the military installation has grown 60 percent and is anticipating a military population of 127,000 by the end of the year.

The swelling number of military personnel in Fort Bliss is exciting for retailers because it means more potential customers and a likely uptick in sales. Fort Bliss’ demographics, much like most military bases, are appealing to businesses because of the spending power the military provides. According to the Congressional Budget Office, the average U.S. Army compensation package totals $99,000, including health care, retirement pay, child care and free and subsidized food, housing and education.

Servicemen chat while waiting for their orders at Smashburger, one of the many restaurant options in Freedom Crossing at Fort Bliss in El Paso. Other recent eateries to join Freedom Crossing include Texas Roadhouse, Chi Town Barbeque and Cinnabon.

According to the City of El Paso, Fort Bliss is the fastest growing U.S. Army installation in the country. Additionally, the base is currently undergoing a $4.8 billion renovation to enhance the installation’s infrastructure, in accordance with the Base Realignment and Closure Act of 2005. These improvements will help facilitate the growth of the booming base, which has swelled due to consolidation of other military installations.

Freedom Crossing is anchored by The Exchange, The Commissary and Grand Theatre Fort Bliss 10, and features existing retailers such as Under Armour, Buffalo Wild Wings, Paul Mitchell Salon, H&R Block, Starbucks, Smashburger, Taco Bell, Patriot Outfitter, GameStop, GNC and many others. While most all stores and restaurants are open to the public, The Exchange and The Commissary are exclusive to military personnel.

The newest round of retailers is a feather in the cap of Freedom Crossing, especially in today’s choppy retail market. In the national retail landscape, businesses have been tentative in their expansion efforts and limit their choices to occupy space in promising markets, according to Marcus & Millichap’s 2012 Retail Outlook.

“What I see at Freedom Crossing is that it is outpacing the positive momentum elsewhere,” says McCoy. “We continue to have double-digit positive absorption whereas during the last few years negative absorption has been the industry trend.”

“(Other retailers) are doing deals but they’re still selective about them,” continues Arnold. “We’re seeing the same thing — they want to make sure that for the few amount of openings that they pick successful ventures.”

The success of the retail lifestyle center at Fort Bliss has spawned similar developments elsewhere. Two more Freedom Crossings are planned at Joint Base Lewis-McChord in Tacoma, Washington, and Fort Sam Houston in San Antonio. Arnold indicates that retail tenants at Freedom Crossing at Fort Bliss are considering these other bases for expansion. “I would say all of them would be willing to go lease space at our other projects,” says Arnold.

These niche centers have legs to grow because retail businesses and restaurants are in high demand for military personnel. In turn, these servicemen and women are an attractive target market for retailers.

“Businesses have long understood the potential in and around military installations, and have wanted to participate,” continues McCoy. “Now there is a traditional shopping center format directly on a booming, long-standing post.”

As more restaurants and retailers expand into the Freedom Crossing at Fort Bliss, there is a typical concern about market saturation. New retailers complement one another more than they compete against established businesses, explains Arnold. That’s particularly the case with food vendors because of growing number of choices for consumers..

“(Having new restaurants) has not split the pie further,” explains Arnold. “It’s actually grown our pie.”

Freedom Crossing at Fort Bliss isn’t resting on its laurels. In fact, Arnold forecasts that the center will boast even more activity throughout the year than it’s currently experiencing. “We do anticipate that we’ll have more retailers,” says Arnold. “I foresee that we’ll have quite a few more press releases through the year announcing new retailers.”


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