NewQuest: Investing in the Future by Predicting Changes in Customer Profile

The Background

NewQuest Properties is a full-service commercial real estate company headquartered in Houston, Texas. They manage a $2.5 billion portfolio encompassing more than 100 projects and 12 million square feet of retail space. They build neighborhood-essential shopping centers aimed at serving community needs and have helped hundreds of first-rate tenants find the ideal space for their business.

Brazos Town Center is a multi-phase regional power center located in Rosenberg, Texas developed and managed by NewQuest Properties for over fifteen years. It is one of the nation's largest and most-visited shopping centers boasting over two million square feet of Class A retail, dining, entertainment, hotel, and multifamily. Currently, Brazos Town Center serves a suburban Houston community as an essential center, and is also a regional destination for smaller cities and communities to the southwest of the greater Houston area. NewQuest recognized the growth projections of the area and sought to better understand not only how to continue to serve the existing customer, but also to provide a successful destination for an evolving trade area and demographic. 

The Challenge

The growth of the Houston DMA makes predicting trade area changes challenging and critical.

Houston is the 4^th most-populated city in the country and ranked #3 in the nation for raw population growth. Houston is also the most ethnically-diverse city in the United States and is touted as “a city of the future”. Changing areas represent new and evolving market bases for shopping centers; the existing customer base doesn’t always stay the same. “We recognize the critical importance of understanding our customer’s interests and preferences, which is why we are investing in data and resources that will help inform the decision-making process and tailor our developments to be best suited for their particular markets,” says Chris Myers, Director of GIS & Research at NewQuest.

Brazos Town Center is a major regional destination as well as one of the largest and most-visited shopping centers in Texas, making it critical to analyze both the current and potential customer types for such an important community asset. To do this, NewQuest sought to identify top customer types visiting Brazos Town Center today, as well as customer types in areas of high historical and projected growth to guide investment decisions and gauge demand for certain types of retail tenants and services.

The Approach

Areas of growth near a shopping center represent potential new market bases. By understanding the demographic and geosocial personas of areas near the project that have grown the most, NewQuest can guide the vision for this community-essential shopping center more effectively. To identify current customer types visiting Brazos Town Center, NewQuest used true-trade areas from Placer.ai, mapped the mobile trade area in Esri’s ArcGIS, and used Spatial’s PersonaLive dataset to quantify the household counts and percentages from each customer segment.

To identify areas that have the highest rate of change, NewQuest utilized Esri’s demographics to highlight areas that have had at least 3% annual growth over the past ten years. Understanding the demographics of the people moving to these areas and who will represent a new potential market base for Brazos Town Center is critical to the continued success of the project.

NewQuest also identified the potential future customer by using Esri’s demographic projections to select block groups in the Brazos trade area projected to grow by 5% or more over the next five years, ranking household counts and percentages of each customer segment.

The Results: Present Day

By segmenting visitation data from Placer.ai, Brazos learned they have two main segments visiting Brazos today in equal proportion: 

1. B01 #FusianFamilies are wealthy ($150 - $200k) and diverse, child-driven families. Dual-income households 4x more likely to drop their kid off at Kiddie Academy. They follow brands like Nordstrom, visit Ralph Lauren, and grab the family pizza at Rosati’s.
2. F02 #LatinEngines are average income ($60 - 75k) singles and couples leaning Hispanic. They are fashion-forward and deal-conscious, being 3x more likely to follow accounts like Target Deals, Anthropologie, and H&M, and more likely to visit restaurants like Pollo Campero and Wingstop.

The Results: The Future

When analyzing top segments in block groups growing by 5% or more, they found the area overwhelmingly contained the first, high-income, family-driven segment B01. There were 10x as many households in segment B01 as F02 (20k vs. 2k).

Although the percentage of visitors from each segment is near-equal today, data from Spatial.ai suggests that the future may look different. This information is critical to the leasing, merchandising, and asset management of Brazos Town Center, as well as the planning for future investments into the project. These insights make sure that NewQuest is addressing the top potential customer, which this data suggests may be a diverse, family-driven customer with 50% higher income.

Giving Retailers a Competitive Advantage

NewQuest ensures its retail tenants have a competitive advantage by going beyond demographics to capture and quantify retailer demand using historical signals from mobile phone visitation, social media following, and household-level segmentation. They take it a step further by analyzing growth trends to ensure tenant success now and in the future.