Austin Alvis, President & Chief Development Officer, NewQuest

Invest: spoke with Austin Alvis, president and chief development officer of NewQuest, about Houston’s growth trajectory, the resilience of retail real estate, and the company’s expanding development pipeline. “Our priority right now is to execute our development pipeline efficiently,” Alvis said.

What is your overview of NewQuest, and what have been some of the company’s biggest accomplishments or milestones over the past 18 months?

NewQuest is a 25-year-old Houston-based commercial real estate developer and investor. We own and operate approximately 13 million square feet of retail-focused shopping centers, predominantly in suburban growth markets around Texas. We are privately owned, and the same partners that formed the company in 2001 are still active in the business today.

We also have a large brokerage platform that focuses on retail and land transactions. In addition to brokerage and asset management, we believe we are one of the most active developers of retail shopping centers in Texas.

We have been fortunate to operate in Texas and particularly in Houston, where growth has been phenomenal. The region’s pro-business climate, job growth, and relatively affordable housing compared to other major markets continue to attract people and companies from across the country.

Over our history, we have developed everything from grocery-anchored neighborhood shopping centers to power centers and large mixed-use developments. Our specialty tends to be large shopping centers at major freeway intersections.

Over the last five years, and especially over the past 18 months, we have been busy. We currently have more than 30 developments that are either under construction or in design, with well over 1 million square feet under construction and more than 6 million square feet in the pipeline. We are particularly proud of the quality of our tenant relationships and the trust retailers continue to place in us to deliver projects that support their growth plans.

My role as president and chief development officer involves overseeing operations while spending most of my time focused on the development pipeline.

Why have elements such as outdoor gathering spaces, dining experiences, and walkability become increasingly important to long-term project success?

Competition from online shopping has changed the role of physical retail. Today, the in-person experience has to offer something people cannot easily get online. Our goal is to create places that are more than simply a box where someone goes to purchase something.

Certain retail categories, such as grocery stores, continue to draw people because customers still want to shop in person. More broadly, retailers that are growing tend to offer either a unique experience or goods and services that are difficult to replicate through e-commerce.

COVID accelerated online shopping, but it also reminded people of the value of gathering and spending time together. As a result, we have increasingly looked at ways to incorporate community spaces into our projects.

That does not mean every project requires the same approach. Some retail uses are highly functional, and customers are focused on convenience. We evaluate each community individually, looking at spending patterns, preferences, and what people value. We then work with retailers to create projects that best fit those communities.

How are population shifts and demographic changes influencing where NewQuest chooses to invest?

Demographics influence everything from shopping habits to dining preferences and service needs. Houston is an exceptionally diverse market, and different communities have different characteristics and consumer preferences.

Our primary focus, however, is growth. We look closely at housing growth and migration patterns because new population growth ultimately creates demand for commercial development.

Regardless of demographic differences, communities need services such as healthcare, dental care, fitness, financial services, and other daily necessities. We follow where growth is occurring and then tailor tenant mixes to fit the needs of each specific community.

Where there is sufficient growth to support new development, retailers generally find the right fit for the market, and our role is to help bring those uses together in a successful project.

How is NewQuest navigating financing headwinds, and are you seeing redevelopment as an opportunity?

Most of our investments continue to be focused on ground-up development. That said, we do pursue selected redevelopment opportunities where we see the chance to improve an existing property or reposition it for changing market conditions.

One example is our Asia-Pacific Retail platform, which partners with Southeast Asian retailers, restaurants, grocers, and other concepts to create shopping centers tailored to those communities. These projects often work well in areas where demographics have evolved, and demand exists for those types of offerings.

From a capital perspective, we are largely self-funded and do not typically seek outside equity for our projects. We do utilize bank financing, and lenders have recognized the strength and resilience of retail real estate.

Retail has performed far better than many expected through recent economic cycles. As a result, there has been renewed interest from institutional investors and private equity firms. The sector’s resilience, combined with Texas’ continued growth, has created a favorable environment for retail development.

Do you anticipate mixed-use developments becoming a larger part of NewQuest’s long-term strategy?

Yes. Our projects are often large enough to accommodate multiple uses, and we have incorporated residential components into projects for many years.

Retailers benefit from having additional residential density nearby, while residents benefit from convenient access to shopping, dining, fitness, and other services. That relationship creates value for both sides.

As a result, incorporating residential uses around our retail developments is a big part of our strategy moving forward.

Where we differ somewhat from trends seen in other parts of the country is in our preference for horizontal mixed-use development. In many dense urban markets, developers are stacking uses vertically, combining residential, office, hospitality, and retail within the same buildings.

What we have found in suburban Houston is that customers generally prefer a different approach. We continue to focus on walkability, connectivity, and quality of life, but we do so through master-planned environments where uses are integrated across a site rather than layered vertically.

What are NewQuest’s top priorities for the next two to three years?

Our priority right now is to execute our development pipeline efficiently.

We have a tremendous amount of opportunity in front of us, along with many tenants who are relying on us to deliver projects on schedule. Because of that, execution is our primary focus.

That means managing costs, managing timelines, and continuing to improve the quality of our developments. We want to remain creative, continue raising the bar on project quality, and successfully deliver the projects that are currently in our pipeline.

For the next couple of years, the focus is straightforward: do what we say we are going to do and execute on those commitments.