Even a casual observer would notice the transformation of North Shepherd Drive that has happened over the past five years. Car lots, repair shops and an assortment of smaller mom-and-pop businesses are making way for big developments with big-name tenants.
The turnover hit overdrive with the opening of the Heights H-E-B at 2300 N. Shepherd Dr. at the end of January. Now there are a slew of for-sale signs all along the corridor as well as for-lease signs in the parking lots of properties that already have been purchased. And with the change, there are businesses that are either closing up shop or moving elsewhere.
One of those business owners is Leo Segev, who owns Mainland Investment Auto Sales but not the property where it stands. The land was owned by Ed Clark, who sold the .9-acre site at 2200 N. Shepherd Dr. last June to the Katz family of Katz’s Deli and Bar in Houston. The family may make it the third location of their eatery, although no plans have been announced.
“I was incredibly impressed with the retail opportunity,” Barry Katz said in a news release at the time. “The size and location of the property on North Shepherd Drive, and being neighbors with H-E-B, made me realize that this was the perfect opportunity to buy property inside (Loop 610) for either retail or restaurant purposes. I am now proud to call Ed Clark a new friend and grateful the Clark family chose to sell the Katz family this property.”
Segev, who had been on North Shepherd since 2014, said he had aspirations of buying the property for a time but also said the sale price almost tripled and he could not afford it. The sale price was not disclosed in the release, but the property is valued at $1.76 million by the Harris County Appraisal District.
Segev said the area started its dramatic change when the alcohol dry laws changed in the Heights and brought in a spate of new businesses.
Mainland is now moving to Airline Drive, and Segev thinks there are advantages to the new location, too.
“I’m going where the clientele is,” Segev said. “The Hispanic community is not here.”
And he’s taking the two 14-foot fiberglass statues created by the Art Guys with him. The statues of men in suits that used to dominate the lot have already started their new life on Airline.
“I’d never heard of the Art Guys, but people kept stopping to take pictures and sometimes they would look at cars. In this business, any attention is good attention, so I got them repaired and repainted,” Segev told Houstonia Magazine in May.
Another business owner who is prepared to close up shop is Raul Osornio, who has run Potros Resale Shop at 2124 N. Shepherd Dr. for 16 years. He said that he does not have a definite closing date but is waiting to hear from his landlord once the deal to sell the land is finalized.
Osornio also thought of making a bid for the property, but the owner has two contiguous lots and wanted to sell them as a package.
“I’m a little sad,” Osornio said. “I’m no longer going to auction.”
The local resident would like to move somewhere close by, but the rising rents – which Osornio said have tripled – are problematic.
Mark Zastrow, who lives in Garden Oaks and owns Heights Autohaus at 1407 N Shepherd Dr., said he’s not going anywhere.
“If the owner sells it, I’m buying,” Zastrow said, adding his lease agreement gives him first rights for purchase.
Zastrow said he has been at the location since 2007 and his business, which services European cars, has been booming ever since.
What’s also booming is the construction around him, including an eight-story structure across the street. Zastrow is learning to live with it.
“It blocks the sun,” he said.
For an idea of the current asking prices of properties along the corridor, LoopNet provides two recent listings. At the corner of Shepherd and 21st Street, .3 acres of commercial land is being offered for $1.25 million, and .46 acres at 1329 N. Shepherd Dr. is going for $2.3 million.