The Latest H-E-B Deal: Facts, Rumors And Best Guesses

The internet lost its collective mind Monday evening when H-E-B, the parent company of Central Market, announced the acquisition of six buildings throughout Dallas, Grapevine and McKinney. As usual, the grocery giant remained tight-lipped with a bare bones press release. Here’s what we know, what we don’t know and our best guess as to which rumors are true. 

The good news is that all DFW residents will soon be closer to that life-changing hatch chili salsa, whether in a H-E-B or its upscale sister store, Central Market. We've been expecting big moves since 2011, when H-E-B built a $20M, 300k SF refrigerated distribution center in Temple, pretty far north for a company based in South Texas.

Now, H-E-B purchased properties from owner Minyards Sun Fresh at Hardin Boulevard and El Dorado Parkway in McKinney, Highway 121 and Hall Johnson Road in Grapevine, Mockingbird Lane and Abrams Road in Dallas, Northwest Highway and Ferndale Road in Dallas, Northwest Highway and Midway Road in Dallas, and McKinney Avenue and Lemmon Avenue in Dallas.

In the release, H-E-B EVP of real estate Todd Piland says the brand acquired these properties to add to its real estate investment portfolio and that the company is evaluating the feasibility and best use of each site. He also stresses that Central Market is the company’s primary growth vehicle in DFW. 

Cencor EVP David Palmer (Cencor is the landlord of Central Market’s Southlake location) notes the significance of Todd's voice in the release. “I thought it was intriguing that H-E-B’s EVP of real estate was quoted,” David tells us. “That really made me consider if these properties are for H-E-B or Central Market.”

The SF of the buildings lends itself to either store format. All Central Market locations in DFW exceed 60k SF—except the Preston Oaks location. This 30k SF former bookstore is the only location in the area the company acquired, not built.

Of the new properties, McKinney, Grapevine and 10203 Northwest Hwy (at the corner of Ferndale Road) locations top 62k SF, Xceligent analytics director Brandon Evans tells us. The Uptown location on McKinney Avenue is 50k SF, the Northwest Highway at Midway location is the smallest of the stores at 42k SF, and the Lakewood location on Mockingbird Lane is 57k SF.

H-E-B stores vary in size per neighborhood. The closest stores to DFW are in Waxahachie, Ennis and Cleburne and run 70k SF, 46k SF and 44k SF, respectively. Some on Twitter have expressed desire for these to become H-E-B Plus! stores, but H-E-B responded that it's "evaluating the feasibility of these sites for potential Central Market locations." Most Plus! locations exceed 100k SF.

Besides SF, neighborhood demographics and proximity to existing stores will help determine the fate of the acquired stores. Demographics in Uptown and Lakewood seem like no-brainers for a Central Market. And those of Lake Highlands and Northwest Dallas could be strong contenders for the upscale grocery as well. 

McKinney could also be a good contender for Central Markets, since the closest location is Plano, but a potential Grapevine site could cannibalize from its Southlake store five miles away. The demographics in both areas could go either way. But unlike H-E-Bs, Central Markets tend to sit on major intersections. 

The grocer owns several land sites throughout Dallas, Fort Worth, Allen, Plano, Carrollton, Corinth, DeSoto, Frisco, Grand Prairie, Mansfield, McKinney and Murphy. This transaction looks like the beginning of another major player in the DFW grocery war. 

H-E-B/Central Market spokeswoman Mabrie Jackson tells us the company will share more details when the transaction completes in a few weeks, but until then, the future of H-E-B in DFW remains a mystery.

What do you think each location will become? Send your thoughts to julia.bunch@bisnow.com.