Brokerage firms serving retailers and their landlords are enjoying excellent times in a healthy retail real estate market that should continue its strength for at least a few more years. Thriving in this current market is United Commercial Realty, the largest real estate brokerage firm exclusive to retail service in the state of Texas.
Since its inception in 1988, UCR has specialized in retail only and concentrates on Texas because "that's the area we know best," asserts Mickey Ashmore, UCR president and CEO. "The principals in each of our offices are from their local markets and have a strong understanding of what drives retail in their specific areas. This keen awareness of local markets is critical to the success of our retail clients."
A concentration on one industry segment in a single state differentiates UCR from other brokerage firms, but what really sets it apart is its focus on service, not development, says Ashmore. "We make our livelihood by servicing clients, not by pursuing our own development interests. Since we're not in a competing situation, we focus all our talents on making sure tenants find the right locations and that landlords achieve the right tenant mix at a fair market price."
In its three offices - UCR/Dallas/Fort Worth, UCR/San Antonio and UCR/Austin - the company's 60 associates and staff members provide seven areas of expertise: tenant representation, project leasing, investment property sales, property/asset management, development services, surplus property disposition and equity capital brokerage - with tenant representation and project leasing its two strongest areas.
The company has represented tenants such as PETCO, Starbucks Coffee, Circuit City, Baskin Robbins, Pottery Barn, The Home Depot, Oshman's Supersports, EyeMasters, HomePlace and Einstein Brothers Bagels, among others. Its leasing portfolio of 10 million sq. ft. includes more than 6.5 million sq. ft. of high-profile shopping centers throughout Texas. The company also handles the disposition of more than 3.5 million sq. ft. of surplus properties for Wal-Mart, Albertson's, Kroger, Circuit City, Eckerd Drug, Office Depot, Western Auto, Blockbuster Video, Walden Books and others. In 1996, UCR became the first U.S. brokerage company to which Wal-Mart outsourced leasing and sales of its surplus properties.
In 1997, UCR enjoyed its best year ever, with a 46% increase in revenues over 1996.
Over the past two years, UCR's tenant representation activities have evolved into a niche area for the company: what Ashmore calls "high-end specialty lifestyle centers," usually located in downtown, urban business districts. He explains that these "main street" retail and entertainment projects provide "a place to eat, shop, work and live, all in the same area. They have a hometown atmosphere and exude a real sense of place. They're not destination shopping areas, but a place to walk around, a place to be."
Lifestyle centers offer high-quality branded merchandise for the higher-income shopper, drawing consumers by their image, design and product quality, notes Ashmore. Entertainment, retail and gourmet food concepts all come into play as high-end specialty tenants typically found in the malls begin to take to the streets.
"Many of our high-end specialty tenants are looking for non-mall opportunities to grow their concepts. We've studied and understand urban situations and have zeroed in on tenants like The Gap, Pottery Barn, Crate and Barrel, Banana Republic, Eddie Bauer and other high-end retailers looking for new venues to expand. At the same time, we bring added value to urban property owners who need help in developing high-end specialty lifestyle centers."
"There's tremendous opportunity in this area," says Ashmore. "By seizing that opportunity, we've become the premier lifestyle leasing company in Texas."
"You lease what you are," he adds. "We have associates knowledgeable about fashion, home furnishings, gourmet food and other retail venues. Their focus and interest in these areas help us serve a broad spectrum of tenants and have made us strong in the niche market of lifestyle retailing."
UCR is the leasing and marketing agent for the retail segment of Dallas' new Mockingbird Station, a 180,000 sq. ft. mixed-use development now under construction. The project offers an urban blend of restaurants, shops, mid-rise residences, offices, hotel and transportation amenities. Mockingbird Station is in the heart of one of the highest density areas of residents in Dallas, an upscale neighborhood where people can work, shop, eat, play and live.
Southlake Town Square in Southlake, Texas, with the first phase scheduled to open January 1999, also has its retail being leased by UCR. This 400,000 sq. ft. lifestyle center will be an open-air, mixed-use development surrounding City Hall, the town square and a band shell pavilion. High-end specialty tenants already committed to the project include Gap, Gap Kids, Harold's, Talbot's, Mi Cocina, Corner Bakery, Starbucks and Victoria's Secret.
Huebner Oaks Center in North San Antonio is a 400,000 sq. ft. regional entertainment and lifestyle center designed to appeal to the area's highly educated, upscale market. UCR leased the retail and entertainment in Phase I, which opened in spring 1997, including a 24-screen AMC theater, Borders Books, Pier I Imports, Ross Dress For Less, Bed, Bath & Beyond and more. UCR is also leasing the retail in Phase II, planned for completion this September, as well as Phase III.
UCR was the catalyst in bringing high-end tenants to Knox Street in Dallas, an older neighborhood now graced with Starbucks, Pottery Barn, a 36,000 sq. ft. Crate and Barrel, a 12,000 sq. ft. Laura Ashley home store and other upscale retailers.
"We're good at merchandising these urban lifestyle centers. We've developed an ongoing relationship with the tenants that locate in them, and the projects' landlords know that UCR can get the deals done," remarks Ashmore.
UCR started as a small entity that leased shopping center space in and around Dallas/Fort Worth. It entered the big leagues of real estate service providers in 1991 when Ashmore joined the firm as president/CEO. UCR experienced a 281% increase in revenues in 1992, Ashmore's first full year at the helm, and has posted double-digit increases every year since.
One of Ashmore's first moves was to enter UCR into membership with Chain Links, the top national retail tenant representation network.
In 1993 Ashmore established a partnership with leading San Antonio real estate professionals Tom and Guyla Sineni, establishing UCR/San Antonio. In its first three years, this office leased well over 2 million sq. ft. of retail space, and sold a 300,000 sq. ft. product to a pension fund for nearly $40 million.
UCR was pushed further into the spotlight when it procured the Blockbuster Video account in 1995. Since then the company has handled more than 50 transactions for Blockbuster throughout northern Texas.
In 1997, the Vanguard Co., one of Austin's best-known commercial real estate firms, merged with UCR, strengthening UCR's statewide position.
"Our growth position is to cover every major market in Texas, and we're doing that primarily through mergers," Ashmore says. "It makes more sense to find a strong firm and merge with it than to create small offices of our own. We want strength in these markets, not just a presence."
As UCR merges and grows, one of its challenges is establishing a solid link of information between offices. The company is investing thousands of dollars in expanding and strengthening its information network.
"We've done a good job at getting where we are today, but we still have a long way to go," says Ashmore. "Our goal is to be the best real estate service provider possible for our tenant and landlord client base, and we're always working to solidify that position. We won't accept status quo."