Deerbrook Mall faced several closures last year, such as the Gap and A’Gaci in August, but it has since filled those spots and now operates at near-full capacity, said Carlos Limontes, the general manager of the mall. The mall will also soon lose Sears, one of its major anchor stores, in April.
Despite this, Limontes said he hopes to curb the “Amazon effect,” which describes the trend of shoppers buying more items online, with the mall’s modern renovations and new tenants.
Mark Mitchell, the president of the Lake Houston Economic Development Partnership, said he believes malls that are well-managed can drive job creation and economic vibrancy and recirculate dollars back into the area.
“Given that the mall contributes over $33 million in payroll tax, sales tax and property tax makes it clear that the mall is an integral part of the Lake Houston area,” Mitchell said.
Refreshing the mall
Brookfield Properties, the owner of Deerbrook Mall, undertook a multimillion-dollar investment to modernize the mall last year. Limontes said the food court was renovated and mall entrances were upgraded.
Food court renovations included replacing furniture, light fixtures and floors as well as revamping the eatery exteriors, Limontes said. Renovations began in June and were completed in September.
As for the mall’s exterior, the previous brown Deerbrook Mall signage at entrances around the mall was exchanged for larger, more modern signs, Limontes said. Construction began in September and was completed in January.
While Brookfield Properties will not share how much was spent on these renovations, Limontes said the changes are a testament to Brookfield Properties’ investment in the mall.
Humble City Manager Jason Stuebe said the Deerbrook Mall has been a “game-changer” for the city’s retail industry since it opened 36 years ago. He said the mall greatly contributes to local sales tax revenue.
“My hope is that [the mall’s] corporate [team] realizes the significance that the mall has in this area and continues to appropriate the necessary funds to make sure that it’s still a viable shopping option,” he said.
Deerbrook Mall also added 15 new tenants in 2019 and several new kiosks—compared to 2018 when six new tenants joined the mall, Limontes said. H&M, JD Sports and Cotton On were among the new tenants.
The mall also gained Burger Buzz, a family-owned restaurant, in January. Burger Buzz owner Said Rastegar said he opened the eatery in the mall—despite the higher rental costs—due to the high number of people at the mall daily and the property owner’s readiness to work with him.
“I truly believe that if I would have opened in a shopping center, I would have got maybe about half of the business and half of the people,” he said.
Combating the ‘retail apocalypse’
Although retailers and malls across the U.S. have taken a hit in recent years, research from CBRE, a data research firm, shows that Houston has largely been able to evade the “retail apocalypse,” said Robbie Kilcrease, the vice president of retail investment sales at CBRE. Kilcrease said he believes Houston-area retail is doing well because of population growth and the high demand for retail and restaurant space.
However, he said it can be difficult for malls, as the rental rate per square foot is typically much higher than in other retail space—from an average of $30 per square foot to $80-$100 per square foot. Kilcrease said malls offset high rental rates with high foot traffic.
“I think the better-located malls are going to continue to do well across the country,” he said.
Deerbrook Mall is not immune to the struggles of large retailers closing. Several of the mall’s national anchor retailers faced bankruptcy challenges or store closures in the last year.
Limontes said he learned in early February that longtime anchor Sears would close its Deerbrook Mall locations in April. Because Transformco, the parent company of Sears, owns the land parcel of the Sears building, Limontes said the mall does not have much control over what will replace it. However, he said he hopes the company will redevelop the space.
Macy’s also announced Feb. 4 via a news release that it would close 125 stores nationwide over the next three years. A spokesperson for Macy’s would not comment on whether the Deerbrook Mall store will close, as the company has not publicly shared a list of store closures.
However, Limontes said he is optimistic Macy’s at the mall will not close, as Macy’s recently upgraded parts of the store and added a Starbucks.
He said the mall will continue offering quality retailers and restaurants, which he believes will keep the Deerbrook Mall viable for years to come.
“As retailers continue to evolve, there will be a continued focus on getting goods to the consumer in the most efficient method,” he said. “A physical presence will be needed, and retailers will look to build that presence with the best malls.”
