Broker Provides Impetus to Developing Houston's New Chinatown
Building a multifamily or retail property is an isolated event. Building a community that lives and works in those properties requires continuous effort. In helping the growth of New Chinatown in Houston, Kenneth Li, CCIM, CIPS, CRS, accomplished both.
Although Houston's Hispanic population is better known, the city's Asian population has exploded in the last few decades. During the 1990s it increased 76 percent, and now approximately 250,000 Asians call Houston home, according to U.S. Census figures.
The first generation of Asian immigrants congregated on Houston's east side, yet expansion of the downtown area pushed rents skyward and prohibited new development. Newer immigrants were forced to look elsewhere for room to set down roots.
Two decades ago, dilapidated buildings and vacant lots marked Bellaire Boulevard in southwest Houston. Yet over the years it has become a thriving business district. Li, owner of Century 21 Southwest, pioneered the way by building commercial properties first and then encouraging new immigrants to build their lives there.
Developing DihoLi started his commercial real estate career in the early 1980s when his relatives began investing in retail and land properties. “When I really decided to get involved with commercial real estate, I found the best way to do it was to pursue the CCIM designation,” he says.
In 1981, while Li was working on his undergraduate degree at Houston Baptist University, his uncle entered a joint venture with a Houston landowner to develop a shopping plaza on Bellaire Boulevard. Li was involved with the project from the very start.
They chose the location because it was convenient and close to a major freeway. Also, “It was surrounded by many apartments and a well-established subdivision at median rent and sales price ranges,” Li says. Besides, there was a very successful but small Asian grocery store nearby to attract Asian-Americans.
Diho Market, an Asian grocery chain well-known throughout the United States, leased the 12,000-square-foot anchor location from which spawned the center's name, Diho Plaza. “Diho means ‘the best' in Chinese,” Li says. He also attracted tenants such as a Chinese bookstore and a dumpling house to fully lease the 40,000-sf center as soon as it was built. It has maintained 100 percent occupancy ever since. “Diho Plaza was the first of its kind in the area and became the focal point of the Asian community,” he says.
Growing New ChinatownSeeing the potential for growth in the area, Li entered another joint venture to acquire a second shopping center near Diho Plaza in 1985. The 90,000-sf center, renamed Diho Square, was 80 percent occupied when Li purchased it, yet Houston's slow economy in the late 1980s soon caused occupancy to drop to 10 percent.
Determined to hold Diho Square as a long-term investment, Li rode out the recession. He introduced investors from New York, California, and overseas to the area and injected more capital into Diho Square. He renovated the existing 32,000-sf grocery store into an Asian-themed supermarket to attract other tenants to the center and to serve the growing Asian-American population. “To bring more traffic and security, we held major events for the community and sponsored many chamber and civic activities like the Chinese New Year Fair,” he says. By 1992 Diho Square was 90 percent occupied.
Li began other commercial real estate projects to serve the increasing population. He developed two residential subdivisions consisting of 440 homes on 100 acres and currently is working on an office condominium building and a medical office property in the heart of New Chinatown.
Li maintains steady occupancy in his retail developments by treating tenants as both partners and family and helping their businesses stay successful. “Whenever we interview a new tenant, one of the criteria is can they mutually benefit the existing tenants,” Li says. “Then we think about what we can do to promote their business as a whole and to create more business opportunities for the newcomers and give them more ideas. Many times, we also help them on the financing.”
Overall, New Chinatown thrives. “Occupancy remains stable because almost everyone works very hard and has enough family members to support them. The failure rates are low. Right now, many retail centers are under construction and may oversaturate the market eventually,” Li says.
Although New Chinatown is not yet a tourist destination in the Houston area, Li and other community members are working toward that goal. With help from city and local economic development authorities, the community recently published a bilingual map and maintains a Web site to inform the public of the area's attractions.
Building a CommunityConstructing commercial properties and maintaining occupancy is a developer's main role. But Li wanted to go beyond that mission to create a place where Asian immigrants felt welcome, but also one where they could assimilate into the American culture and economy.
“When I was working at Diho Market, I joined the local chamber of commerce to promote our community,” he says. “I began to realize that we, as Asian-Americans, needed to merge into the mainstream by contribution and participation. Most important is that we do it for our future generation to let them enjoy more opportunities.”
To illustrate active community participation, Li founded the Asian-American Real Estate Association to “try to group Asian-American real estate professionals together to serve the community better,” he says. He also was the first Asian-American to be appointed to Houston's planning commission.
To attract new immigrants to Houston and New Chinatown, Li expounds the city's affordability and promise. “Houston has lots of business opportunities for newcomers, especially for younger families,” he says. New Chinatown has 10 Asian-American-owned banks to serve its residents and businesses.
In working with new immigrants, Li never underestimates their purchasing power. “Be patient,” he advises. “Asians are very cautious and reserved and like to group their family members to do business together. Normally the elderly make decisions, and it is not easy to gain their trust. Referral is more effective than advertisement.”
To create a community of people, not just buildings, Li advocates clear vision, persistence, and the courage to take risks. “After all, creating a community out of nothing may not be the best use of the resources in terms of cash return; however, the goodwill and non-monetary rewards may be much higher.”
In the future, Li wants to expand his horizons, “to do more work outside New Chinatown,” he says. “[I want to] go to Asia to exchange ideas about what I learned here and what they are doing there. It is a small world anyway, and it's getting smaller.”