Chip and Joanna Gaines, stars of HGTV’s Fixer Upper television show, sparked a bit more media excitement in January. The Dallas Morning News reported that Chip would be converting a silo at the couple’s Magnolia Market at the Silos tourist destination into a store for his work-apparel and tools line. The Silos is a 2.6-acre former cottonseed mill in downtown Waco, Texas, that the couple converted into a shopping and family destination in 2015. The Silos includes Joanne’s 16,480-square-foot Magnolia Market home-furnishings store, the Magnolia Café, some food trucks, and open space.
A spokesman told the newspaper that Chip’s Corner (as the store is to be called) would open in the silo this year and that they were still pondering uses for a second silo. Some 20,000 to 30,000 people visit the Silos each week, but much of the buzz is overlooking what is taking place in the surrounding neighborhood, as entrepreneurs and speculators pursue similar developments. Subsequently, rents, property values and even hotel occupancy rates are rising fast.
“We call it the Chip and Joanna effect,” said Gregg Glime, an associate with Coldwell Banker Commercial Jim Stewart, Realtors, in Waco. “What they have done downtown has really catapulted interest.” Among other developments, Glime is handling leasing for the Mary Avenue Market, a renovated 11,000-square-foot building close to Magnolia Market. A local developer acquired the property last year, and it will soon house a furniture store, a clothing boutique, a pie shop and other tenants.
Glime says that when he began focusing on downtown retail, around 2013, it was hard to lease space for $1.25 per square foot. Now space is fetching at least $1.50 per square foot, and most is leasing for $2 per square foot, he says. Meanwhile, midway through 2016 the Waco Tribune-Herald reported that some downtown appraisals had doubled or even quadrupled to upwards of $40 per square foot in a year for tax purposes, sparking disbelief and anger among property owners. In December the paper noted that the average hotel occupancy rated had climbed by 13 percentage points to 71 percent over five years.
The downtown will continue to attract local or regional users that complement Magnolia Market, according to Jim Peevey, a founding partner of Waco-based Reid Peevey Commercial Real Estate. Peevey has approached some national tenants regarding a 1.1-acre parcel next to the Silos that he is marketing for
$1.3 million, but most want to locate at the Central Texas Marketplace near Interstate 35 or in the suburbs.
Still, the Gaines’ celebrity continues to boost downtown’s appeal, he acknowledges. “I’m marketing a warehouse that five years ago nobody would have looked at even for its intended use, but I’m showing it tonight for a mixed retail concept,” he said last month. “People are coming into town to go to Magnolia Market, and developers want to feed off the frenzy.”