You might ask yourself: Why is Weingarten Realty in South Texas? This portfolio is unique for us in that it’s not a major metro and it’s not our typical demographic profile, but we love South Texas and so do other retail REITs who have significant holdings there. Weingarten Realty’s portfolio in South Texas represents approximately five percent of the company’s ABR.
South Texas is booming and our retailers are performing very well there. Border traffic is one of the main drivers of the South Texas economy, as Mexican residents can legally cross into the US to shop and visit. Over 113,000 Mexican residents cross every day into South Texas, which equates to 40 million people per year. Over 1.5 million people live in the United States’ Rio Grande Valley trade area and over 1.5 million Mexican residents live in the sister cities of Reynosa, Matamoros and Nuevo Laredo, resulting in a primary trade area of over 3 million people. There’s also an additional 4.5 million people in Northern Mexico within 200 miles of McAllen and Laredo, contributing to a secondary trade area driving additional retail sales.
The South Texas market also benefits from the fact that Mexican retail is very much under served at only 1.6 square feet per capita compared to the U.S. average of 24 square feet per capita, which is why there is such a strong influx of people crossing to shop. At times, over 70 percent of the vehicles in the parking lots in our centers have Mexican plates. Two other significant drivers of the South Texas economy are the Eagle Ford Shale play, one of the largest oil and gas developments in the world based on capital invested, and the Port of Laredo, the largest inland port in the nation representing 60 percent of U.S. trade with Mexico.
Weingarten Realty has 13 properties with 1.7 million square feet of retail space in South Texas and our ABR in this market is made up of 90 percent national and regional credit tenants. Our only grocer in South Texas is market leader HEB, which takes anywhere from 65,000 to 150,000 square feet. The HEB stores in our centers have sales ranging from $750 per square foot to over $1,000 per square foot, generating volumes from $55 million to over $100 million in sales.
Ross, TJ Maxx, HEB, Old Navy, and Hobby Lobby are our top five tenants in South Texas, making up over 37 percent of our ABR in the region. The anchor tenants operating in this portfolio consistently outperform stores in many of the other major metros. One of our Ross stores in McAllen does three times the sales volume compared to the chain average of just over $8.1 million. Ross has added three additional stores to the market and their sales volume continues to increase at our site as well as at their other locations.
Our investments in these centers have been a great way for Weingarten Realty to capitalize on the underserved Mexican shopper while avoiding the risk that comes with owning and operating properties in Mexico.