MegaMarshall's Leads Baybrook Re-Tenanting

HOUSTON-The parent company for the Marshall's apparel chain has inked a 10-year lease to put a 60,000-sf MegaMarshall's into a box vacated by Target at the Baybrook Square shopping center.

Sources say the chain's parent, TJX Cos. of Framingham, MA, plans to open the MegaMarshall's in mid-October. The store is one of several openings planned for October in the 300,000-sf Baybrook Square, which is undergoing re-tenanting and renovation in the wake of four major anchors leaving in the past two years. Office Depot is replacing a former Kids R Us store; DSW Shoe Warehouse has gone into Service Merchandise's empty space; Pier One is replacing Palais Royal, a regional Houston apparel chain; and Golf Galaxy and a few other small tenants are joining MegaMarshall's in the 110,000-sf former Target box.

Kids R Us, Service Merchandise and Palais Royal shuttered their locations after declaring bankruptcy while Target left after its lease expired to move a quarter-mile down the street to open a Super Target after an attempt failed to buy land and expand at Baybrook Square, says Lynn Davis, principal at Fidelis Realty Partners. Fidelis acquired the shopping center Dec. 31, 2003, from Lincoln National Life Insurance Co. of Fort Wayne, IN.

"It was luck of the draw with the timing," Davis says, adding the four anchor tenants departed the center within months of each other and shortly before Fidelis took over. "So, we are redoing the center from east to west." As part of the repositioning effort, Fidelis purchased the big box from Target.

A standard Marshall's fills 30,000 sf whereas MegaMarshall's runs 50,000 sf or more. TJX has another MegaMarshall's in the River Oaks Shopping Center and is planning one for Pinecroft Shopping Center in the Woodlands and eyeing another location at Hedwick Village at Interstate 10 and West End Lane. The relatively young MegaMarshall's branding has furniture departments and the Baybrook store will be one of the first to include a 10,000-sf shoe "megashop," says a TJX spokeswoman.

Neither Davis nor TJX officials would discuss the value of the Baybrook Square lease, but Davis did confirm that retail rents were rising at Baybrook Square as a result of the center's repositioning and renovation. "The value did go up," she tells GlobeSt.com.

Houston broker Matt Reed says Target's old spot was up in the air at least two years. Reed, now with the locally based NewQuest Properties Inc., represented Baybrook Square as a Trammell Crow Co. broker when TJX negotiated its lease. "Target did very well, about $600 a foot there and for a very long time tried to upsize in that center to a Super Target, but they couldn't get the land to do so," Reed says.

After Target left, Service Merchandise, Palais Royal and Kids R Us darkened their shops. The only big tenant to stay was Sun & Ski Sports. Faced with an array of empty storefronts and sagging sales, former owner Lincoln National tried finding a number of potential tenants. "There were a lot of people they toyed with to get into that center," Reed says. "MegaMarshall's was always one of the lead retailers to get to spur the redevelopment." Once Lincoln sold the center to Fidelis, the new owners went full-steam ahead with repositioning the 1980s-era Baybrook. "The entire center is under construction because we're taking off the skin and redoing it," Davis says.

Location apparently was never Baybrook's problem. The intersection of Interstate 45 and Bay Area Boulevard holds two other regional power centers and the Baybrook regional mall. The freeways feed into the upscale Clear Lake and Johnson Space Center areas. "This is a growing, great area to be in," Davis says.