Property expert says economic development initiatives are creating unexpected retail opportunities in secondary markets.
A wave of semiconductor manufacturing investment is reshaping the retail landscape in unexpected corners of Texas, according to one leading retail property investor who sees these economic development initiatives creating compelling new opportunities.
“Sherman is seeing tremendous investment from chip manufacturing facilities,” says Ginnie McCorkle, CFO and Partner at Kobalt Investment Company, referring to the firm’s recent acquisition in the North Texas city. “We’re really excited to see the growth of the Sherman community over the next five to 10 years.”
McCorkle says her firm’s strategy focuses on identifying markets with strong underlying growth drivers, whether they’re major metropolitan areas or smaller communities experiencing significant economic transitions.
“We’re looking for great neighborhoods, where the demographic base is growing, population wise, that typically involves great school systems, good amenities from a community perspective, or some sort of economic development shift that is creating growth,” McCorkle explains.
This approach has led Kobalt to some perhaps surprising locations. McCorkle points to the firm’s success in Laredo, Texas as an example of how shifting trade patterns can create retail opportunities: “We’ve seen a huge growth in the border town of Laredo and our shopping center there, the performance can attest, it’s doing very, very well.”
The growth in Laredo, she explains, has been driven by a shift in international trade patterns, with more goods moving through land-based border crossings rather than arriving via container ships.
When evaluating new markets, McCorkle says her team looks beyond simple population statistics to identify deeper demographic trends: “Are we seeing a generational shift in a neighborhood, perhaps going from an older generation to younger families with kids? Is that something we can capitalize on from an existing shopping center?”
This detailed market analysis helps the firm identify opportunities that might be overlooked by larger institutional investors. “Certain markets are hot on Wall Street, and when they’re hot on Wall Street that can be tough for us because their cost of capital is just lower than ours,” McCorkle notes.
The firm plans to maintain its measured approach to acquisitions, targeting three to four shopping center purchases annually. McCorkle says this pace allows them to maintain their hands-on management style while capitalizing on the economic growth reshaping Texas and surrounding markets.
“Texas has been a great market for us,” McCorkle says. “Texas is seeing a tremendous amount of growth economically, a huge population shift here, which is wonderful.”
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