Texas Malls Receive Facelifts, New Life

Virtually every American mall that is struggling owes its woes to some combination of e-commerce growth and millennials’ preference for experiential retail.

But the simple fact remains that e-commerce still only accounts for about 10 percent of total retail sales, according to the U.S. Department of Commerce. And while store closures are still running rampant, new retailers are rapidly backfilling those shuttered spaces and introducing new concepts to maintain consumer appeal.

To that end, projects that convert enclosed malls into open-air destinations that feature local or first-to-market retail concepts, more food and beverage options, open spaces for communal events and distinct entertainment (and other) uses represent paths to salvation.

These projects offer developers and landlord opportunities to restore their malls as bastions of shopping, dining and entertainment — and to address unfulfilled needs within the local retail market. While every project is different in terms of how the tenant roster is revamped and how much construction is required, all mall redevelopments share the goal of returning to relevance within the community.

In this piece, we highlight four Texas malls that have or are undergoing extensive redevelopments to boost occupancy, sales, foot traffic and prestige in the eyes of consumers.

Park Heritage

Earlier this year, developers KDC and Seritage Growth Properties, an entity that was formed in 2015 to unlock underlying value in a portfolio of retail properties acquired from Sears, formed a joint venture. The new entity was created to redevelop the 23-acre former Sears site at the Valley View Mall in Midtown Dallas into Park Heritage, mixed-use development. Demolitions began in May and have since been followed by development of infrastructure and new road networks.

The site is located at Preston Road and the LBJ Freeway, which has a daily traffic count of more than 300,000 vehicles and was recently redeveloped to make the property more accessible. Plans currently call for more than 1 million square feet of office space, 600 multifamily units, a boutique hotel, 350,000 square feet of retail and restaurant space and a three-acre park that will anchor the development.

“Before the project started, most of the mall’s other anchors had closed or vacated, leaving an empty shell that had become an eyesore to this area of Dallas,” says Bill Guthrey, senior vice president of land development at KDC. “We saw a unique opportunity to reposition the Sears land into an integrated mixed-use development in a growing part of the city.”

The development team is especially excited about the office component, which is entitled for as much as 1.8 million square feet of new space. Guthrey notes that Park Heritage will mark the first new office building constructed along this corridor in more than 30 years and that the surrounding retail, restaurant and entertainment uses will be attractive to large employers.

The developers are also making a concerted push to curate a tenant roster that is largely resistant to e-commerce, including a grocer, multiple restaurant spaces, boutique retail and pure-play entertainment concepts.

“Consumers want a dense, walkable mixed-use environment to enjoy, and nothing like that exists in this part of Dallas,” says Guthrey. “By providing these needed and wanted elements, Park Heritage will become a North Dallas destination.”

Parkdale Crossing

This spring, Tennessee-based shopping center REIT CBL Properties completed its redevelopment of the former Macy’s store at Beaumont’s Parkdale Mall. The project involved splitting the 110,000-square-foot anchor building into separate spaces that were backfilled by Dick’s Sporting Goods, Five Below and HomeGoods.

According to Stacey Keating, director of public relations and corporate communications at CBL Properties, the new tenants were carefully chosen as complementary co-tenants to the other retailers, particularly in terms of those in the value-oriented retail segment.

“Recapturing underperforming anchor store locations gives us the opportunity to incorporate new uses or retail categories that we otherwise wouldn’t have the ability to do elsewhere on the site,” she says.

The mall, which has since been rebranded as Parkdale Crossing, still houses traditional department store anchors like Dillard’s and JC Penney. Prior to the redevelopment of the anchor space, CBL retrofitted the mall with other internet-resistance uses, including Tilt Studio, a concept that features mini-golf, laser tag, arcade games and bowling.

In addition, the company added Francesca’s to its tenant roster, a move that brought multiple apparel, jewelry and accessory items into the mall under one store. CBL also introduced new a number of new dining options to Parkdale Mall and worked with the property’s most productive retailers to remodel and expand their physical spaces.

“Our vision is to transform our properties from traditional malls to suburban town centers that offer not just great retail options, but incredible dining, health and wellness, entertainment and a variety of other uses,” says Keating.

San Jacinto Marketplace

Fidelis Realty Partners broke ground on the redevelopment of the 1.1 million-square-foot San Jacinto Mall, located in the eastern Houston suburb of Baytown, in July.

The first round of demolitions at the site, which included the razing of the former Sears anchor space, is complete, though the anchor spaces occupied by Macy’s and JC Penney remain intact. The second phase of demolitions will begin in 2020, and these anchor tenants will remain open throughout the construction process.

San Jacinto Marketplace, located in the eastern Houston suburb of Baytown, is a redevelopment of San Jacinto Mall. The property originally opened in 1981 but had not undergone any renovations by 2015, when Fidelis Realty Partners acquired it. The repositioning plan centers around outdoor retail with true lifestyle uses and open spaces that will support family gathering and entertainment.

Metro Houston-based Fidelis originally acquired the asset, which will be repositioned as an open-air center called San Jacinto Marketplace, in 2015 from Triyar Retail Group. Since that time, the elements of leisure and communal gathering have pervaded numerous phases of the redevelopment plan.

“We purchased the mall with the intention of redeveloping it into a 1 million-square-foot outdoor retail center that featured a prominent lifestyle area where friends and family can gather for festivals and outdoor entertainment,” says Judy Aiello, vice president of construction and development at Fidelis. “The ultimate goal is for San Jacinto Marketplace to be the central gathering place for residents of Baytown and surrounding areas.”

An open green space that will span two to three acres will function as the nucleus of the redeveloped mall, which will also feature a bolstered lineup of casual, fast casual and dine-in restaurants. The development team notes that the surrounding trade area is underserved on both dining and entertainment uses, which will complement the anticipated growth in office development in the coming years.

“Baytown has become a major center for economic growth in Metro Houston,” says Mary Evans, general manager of San Jacinto Marketplace. “The new mall will meet the community’s growing demand for popular retailers, restaurants and family-friendly outdoor activity areas.”

The initial phase of the new retail component of the project is scheduled to open in late 2020.

Golden Triangle

Golden Triangle Mall, located north of the metroplex in Denton, originally opened in 1980. By 2011, when a Weitzman-managed limited partnership acquired the 790,000-square-foot property, it was very much in need up interior and exterior upgrades.

The need for fresh capital and renovations was most evident in the anchor spaces.  Anchor JC Penney remodeled both the interior and exterior of its space, while inline retailers like Victoria’s Secret and Bath & Body Works undertook capital improvements to their spaces and merchandising. The majority of this work was completed between 2014 and 2017.

The renovation of Golden Triangle Mall, located in Denton, laid the groundwork for a number of new restaurants to open and for a new fitness anchor to be added.

More recently, the owner of the mall, GTM Development Ltd., diversified its tenant roster by signing Fitness Connection to a 56,000-square-foot lease. The Houston-based health club chain backfilled a space previously occupied by Designer Shoe Warehouse and will open to the public in 2020.

“The renovation essentially saved the mall from obsolescence,” says Herb Weitzman, executive chairman of Weitzman. “These upgrades enabled us to attract new locations for well-known brands like H&M, Torrid, Lids, Pink, Buckle, Zumiez, White Barn, Corner Bakery and Taco

The programming of the redeveloped mall has been critical to its success, as the site now hosts events like Taste of Denton, the Salvation Army’s kettle drive kick-off and a Toys for Tots event dedicated to the children of Marine Corps service members.

The mall also hosts outdoor summer concert series and performances by the Denton Community Theatre. The management team expects the local theater group and impending fitness uses to be major traffic drivers to the mall across a range of consumer types.

“The Golden Triangle Mall is all about the community,” says Weitzman. “Denton is a high-growth market with 370,000 people in its trade area, including about 61,000 university students. With a tenant mix that also includes Macy’s, JC Penney, Dillard’s, Barnes & Noble, Ross and a number of in-line concepts, we have a mix designed to appeal to students and families and visitors alike.”

— By Taylor Williams. This article first appeared in the December 2019 issue of Texas Real Estate Business magazine. 

Content Partners
‣ Bohler
‣ Lee & Associates
‣ Lument
‣ NAI Global
‣ Walker & Dunlop

Webinars on Demand


Subscribe to the newsletter

Read the Digital Editions

Western Affordable Housing Business

Texas Affordable Housing Business

Southeast Affordable Housing Business

Heartland Recent Issue

Northeast Recent Issue

Southeast Recent Issue

Texas Recent Issue

Western Recent Issue

Shopping Center Business

California Centers

Student Housing Business

Seniors Housing Business

Featured Properties  

2021 Finance Insight Video Interviews