Wednesday, August 4, 2010

Rio Grande Premium Outlet site visit

5001 East Expressway 83
Mercedes, TX 78570
(956) 565-3900
Regular Hours Mon-Sat: 10am-9pm, Sun: 11am-7pm

Recently I visit my Kids Supercenter store in the Rio Grande Premium Outlets. This center got off to an amazing start when it opened several years ago. Its second year did not live up to the initial hype. More recently this center has been hit harder than most. Our economy is bad and that hurts all retail, but they face the additional hurdles of a worse economy in Mexico, the devaluation of the Peso and extreme violence on the Mexican side of the border.

The Mexican border violence between rival drug cartels started in Jaurez. It has now spread to Matamoros and Reynosa which are the two largest border crossings near the center. This has dramatically impacted the business.

After a great visit to my Kids Supercenter Outlet store I toured the rest of the center.

There are currently 11 vacancies out of 138 stores for a vacancy rate of 8%. However 9 of those 11 vacancies are in the new phase which only has 35 stores. So the new phase has a vacancy rate of 26%. Those spaces have never been filled since the phase was constructed. That is about to get worse by one store. While I was there the New Balance Factory store was running a going out of business sale.

Most of the vacancies in the new phase are at the far end of the phase closest to Saks Fifth Avenue Off 5th.

On the positive side, the windows of one vacancy said American Eagle Coming Soon.

Mark Libell

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