Washburne Raises The Rent

Photo by Manny Rodriguez

Pardon me if you’ve already read it, but I just got around to finishing D Magazine‘s profile of Highland Park Village owner Ray Washburne. The part of the piece that sticks out is that Washburne is, for the most part, quadrupling tenants’ rent.

“When we looked at the quality of tenant we have and their sales per square foot, I realized that our competition isn’t in Dallas,” Washburne told reporter Joseph Guinto. “It is not Inwood Village, and it is not Preston Center. Our competition is Worth Avenue in Palm Beach, Rodeo Drive in Los Angeles, Americana Manhasset in Long Island, and SoHo in New York. And, in those places, rents are $150 to $200 a square foot or more.”

Assuming a few Highland Park Village patrons are reading this, do you think this tactic will hurt or help the shopping center? Or will it have no effect on your shopping experience whatsoever?

By Dan Koller Nov. 11, 2010 | 7:45 am | 28 Comments | Comments RSS
28 comments to "Washburne Raises The Rent"
  1. Zsa Zsa @ November 11, 2010 at 8:07 am
    Dahlink, as long as I can buy my Jimmy Choos at HPV I don’t care what the rents are.

    xoxo,
    Zsa Zsa

  2. mk @ November 11, 2010 at 8:34 am
    I think it will definitely hurt business, because the lower-end shops like Anthropologie & Banana Republic may have to move out, because their revenue can’t compensate for that kind of rent increase. If HPV simply becomes another Rodeo Drive, with nothing but super-luxe boutiques, I will no reason to go there except for Mambo Taxis at MiCo’s.

  3. Taylor @ November 11, 2010 at 8:47 am
    @mk – may have to move out? BR has been gone awhile for this precise reason….but HELLO CHRISTIAN LOUBOUTIN!

  4. Buddy @ November 11, 2010 at 9:26 am
    What a bad guy. How dare he make decisions about his own personal property without consulting people who paid nothing for it. In fact, the community should just vote to take it away from him and pay him nothing.

  5. Tk @ November 11, 2010 at 9:46 am
    Bummed. I agree with mk. If they quadruple the rent then the friendly places will have to vacate. There would likely be no more Celebrity Bakery and their fabulously decorated seasonal cookies, no more Who’s Who, no more shoe repair… Who knows about Tom Thumb, Cooters, Starbuck’s or Anthropologie. What about St. Michael’s Womens Exchange— that’s for charity. They can’t afford a huge rent increase.
    I’m getting depressed. HPV is lovely, but it needs to be a balance of high end and <> user friendly stores.

  6. Beverly on a Budget @ November 11, 2010 at 11:37 am
    Way to keep it classy Ray, unfortunately the only shops I ever venture in are Tom Thumb, Starbucks and Menchies. Is it only the out-of-towners with thick accents and rented Lamborghinis that shop here or was the recent Partners Card frenzy indicitive of our neighbors capicity to spend high-end?

  7. svr @ November 11, 2010 at 12:28 pm
    i think there is only soo much escada, calvin, harry winston one wants in the neighborhood. the reason the park cities is so unique is that we have this shopping oasis right at our backdoor. if you take this center and make it abt people who are visiting or only for a certain echelon, then certainly it will lose alot of patrons. we want a mix of high and low. if the anthro’s and smwe leave, then it becomes a destination for only a certain catagory. if tom thumb leaves, that will really be a problem for those of us who live right by HPV. and it’s sad that the theater will now rarely show kids movies…as that has been taken away from them in the last year and a half. the neighborhood enjoys having a place for the family to visit and to entertain them. i don’t like the direction at all. i wish the village would keep a balanced and mixed cleintelle base for people of all spending patterns AND all ages.

  8. FK @ November 11, 2010 at 12:30 pm
    Washburne will be able to better manage the tenant mix than is posible on Rodeo Drive and Worth Avenue, where many different investors own many different buildings. Washburne is smart; He knows that you need a healthy balance in the shopping center. Lower margin businesses like grocery stores, coffee shops, restaurants and bakeries create good retail traffic. The boutiques are willing to pay top dollar for the higher traffic environment. Not too mention HPV probably has better demographics than all of the other luxury shopping districts mentioned. You also have to balance the credit of the tenant mix. Large public companies with strong balance sheets like Safeway, Starbucks and Urban Outfitters create a more secure and predictable cash flow for the owner. This is important for optimizing the debt rates Washburne can access. Managing a shopping center is a business. It is not in the best interest of the business to lose tenants like these.

    Worst case scenario is a few shops are squeezed out and move to Lovers Lane or Snider Plaza. Big Deal. Anybody who is truly upset that their 3 minute drive time to their favorite boutique camera store has doubled to 6 minutes should read “Who Moved My Cheese”. I have always thought a really cool restaurant should be where the UPS store is. It’s a great space and could have a great patio. I would be glad to drive to the UPS store on Lovers or Lemmon!

  9. Ostrea @ November 11, 2010 at 12:34 pm
    If Tom Thumb leaves, I’ll have no reason to go to HPV anymore unless a movie I want to see is showing at the theater.

  10. FK @ November 11, 2010 at 12:59 pm
    Furthermore!…Washburne probably lives within half a mile of HPV. He will probably want his favorite shops around. (I hope he likes Deno’s!) As with sports teams, there is something to be said for local ownership.

  11. A. B. @ November 11, 2010 at 1:35 pm
    I send Ostrea’s opinion and add: bring back 7-11!

  12. A. B. @ November 11, 2010 at 1:35 pm
    Sorry–SECOND Ostrea’s opinion :)

  13. V @ November 11, 2010 at 1:55 pm
    RW is right, HPV is unique…that said, like many other “hood rats, I’m sad HPV is no longer “our shopping center”. Maybe that’s why, after all these years, Tom Thumb has decided to build a real store on Inwood. Depending on the mix he keeps, we may well brace ourselves, as many other global highest end retail meccas have done, to see the Buses by Bill pulling up with (fill in the blank of the countries with the strongest currency) tourists for the boutiques that remain. And to md’s point in the above comment – a great place for a Mambo, which by the way is a RW restaurant..

  14. svr @ November 11, 2010 at 3:10 pm
    i’m w/ AB…bring back 7-11. also, a better italian restaurant. who wants a cheese shop?? or that random candle store? bring in a great toy store. i REALLY miss the old book store and that great gift store next door. randall something?

  15. Beverly on a Budget @ November 11, 2010 at 5:13 pm
    Randall Morgans?

  16. rich kid @ November 11, 2010 at 9:34 pm
    Ray will be joining the long list of us who blow daddies money – at least he’s not doing it on drugs and hookers, though. HPV will be 1/2 empty in two years or rents will be right back where they were before he took over – mark my words.

  17. Simon Sez @ November 12, 2010 at 8:55 am
    Yup, FK and rich kid covered the salient points…especially rich kid’s last sentence…if the Fed and other central banks continue quantitaive easing most fiat currencies will be toast…and the Chinese bubble will soon pop reducing tourist bus stops at HPV.

  18. FK @ November 12, 2010 at 10:09 am
    It’s a good strategy. He’s looking at the boutiques sales volume and comparing his rents to the rents the exact same tenants are paying in other markets. As long as the ratio of rent/sales makes sense for the tenant, they will pay the increased rents. Dallas is one of the fastest growing cities in the country, and HPV is located at main and main at the core of its greatest concentration of affluence. Luxury retailers want to be here. To borrow a line from Wall Street…”Don’t sell a seat to a guy for 79 bucks when he’s willing to pay $379!”

  19. D @ November 12, 2010 at 10:22 am
    @RichKid,

    I don’t know the guy, but reading the article gave me the impression that this guy made his own money, and used some connections to help him along the way. And he then married some money too. But he seems like a guy who hustles, works hard, and has endless ambition.

    I read the comments first, and then the article, and was frankly impressed with him.

  20. Meredith @ November 12, 2010 at 7:58 pm
    Wait–the cheese shop is FABULOUS!!!!! Everyone should give them a try!

  21. HP Mama @ November 12, 2010 at 11:53 pm
    For those of us who live within a mile of HPV, we like the neighborhood feeling when we “run” to Tom Thumb, drop off shoes at Deno’s, pick up a gift at SMWE, and then stop off at one of the restaurants for a family dinner or just a quick lunch with friends. If the rents are raised, it will affect these local establishments, and they will have to leave. A few high-end stores are fun, but they are not where people want to buy all of their wardrobe staples. The owner needs to get in touch with reality and realize all of us who live here don’t have his income. The Village is ours…we keep the stores in business, but not all of us can afford to shop day in and day out in the stores he wants to attract. Get Real!

  22. Jgo @ November 13, 2010 at 11:24 am
    No way the demographics are the same for HP vs Palm Beach or the Hamptons and for sure not SoHo. Dallas will never attract the global shoppers that lower Manhattan does…cheap euros kill it over here. Three French families and a Canadian one have bought homes this year on my historic block in Brooklyn Heights which I guess ia good for me. HP might have higher incomes than Manhasset but a huge bulk of the Hamptons are second homes. Palm Beach is also second home/ vacation paradise and that strip is right by The Breakers which is just a little different from DCC. For what it’s worth some shops were boarded up in the Hamptons over the last two summers but it was the end of the world here.

    Totally love HPV and not trying to knock Dallas…just seems like a strange set of comps. The value is what people will pay though, right?

  23. Scooter @ November 13, 2010 at 3:24 pm
    If Tom Thumb leaves, and the rent is 4x, that means the only boutique that could afford the rent in Wal-Mart.

  24. WCM @ November 13, 2010 at 3:32 pm
    Everyone is an expert.

    Washburn has had lucky breaks and unfair advantages. How else can it be explained that he owns HPV and you don’t? It’s funny how the human brain tricks us into thinking we are smarter than we actually are.

    The way I look at it, if someone has more money than me, they are probably smarter than me. Washburn is smarter than me.

  25. dennis beecherl @ November 13, 2010 at 3:36 pm
    beecherl I liked the hpv the way it is now before he took over

  26. Patsy McDonald @ November 13, 2010 at 11:24 pm
    I think raising the rent of HPV will definitely hurt the Village in the long run. Pride cometh before a fall!

  27. Sharpay @ November 14, 2010 at 1:18 pm
    Washburn needs to revisit his notes from economics and real estate classes. It’s all about location, location, location. Dallas doesn’t have the tourist industry, population density or shoreline of the places named. His competition is North Park, the Galleria and similar locations in Dallas and even (gasp!) Houston.

    I hate to be negative but I see bankruptcy in his future.

  28. concerned @ November 14, 2010 at 9:44 pm
    The 3 top cities Ray mentioned in the article with which he thought HPV was
    comparable were:1-NYC, 2- LA, and 3-Palm Beach. Those are the 3 top cities 1,2,3, in US with the most billionaires. Where exactly does Dallas fit in?

    Sharpay is right on.

Leave a Reply