COVER STORY, MARCH 2006

PAVING THE WAY
Developers bring new retail projects to areas of booming growth.
Leah Sanders

As those in the real estate industry know, where the people go, retail must follow. However, certain areas of high population growth in Texas are lacking specialty retail centers. To fill the need for specialty shopping in these areas, several retail developers are going where the people are, allowing residents to find what they want close to home. Texas Real Estate Business recently spoke with these developers that are fitting retail to the niche of Texas' quickly growing areas.

The Shops at Highland Village

Regency Centers plans to open The Shops at Highland Village   in Highland Village, Texas, in October 2007.

“The location was chosen because of the void of this type of retail — the specialty, lifestyle shopping center — in the demographic, which demands that type of retail,” says West Miller, senior vice president of investments at Regency Centers. “The distance from other competing retail areas was one of the main reasons for our impetus of focusing on this area.”

As a result, Regency Centers is working to bring specialty lifestyle retail and service-retail tenants to The Shops at Highland Village. The company, which also leases and manages the project, has already signed or is in lease negotiations with Barnes & Noble, AMC Theatres, Ann Taylor, Ann Taylor Loft, Bath & Body Works, Claire's, Talbots, Chicos, Soma, White House|Black Market, Coldwater Creek, Coldwater Creek Spa, Eddie Bauer, Francesca's, Banana Republic, Victoria's Secret, Ben & Jerry's Ice Cream, Shoe Pavilion and The Limited Two. The initial phase of third-party leasing is being handled by United Commercial Realty.

“Our center will be an amenity not only because of its uniqueness, but because of our tenants,” says Miller. “The other three shopping centers at the intersection are value-oriented developments, with Wal-Mart on the northeast corner, Lowe's Home Improvement Warehouse on the southeast corner and Target on the southwest corner. The Shops at Highland Village will create an additional population that would like to have that quality of retail within their immediate residential area.”

Miller also adds that the design, which he calls “state-of-the-art,” will be an amenity to the project. The hill country design will include a lake and an interactive fountain, in addition to second-floor retail/office space. The center will also feature Wi-Fi wireless Internet and high levels of police, security and management.

Kirk Hermanson of Hermanson Land Development was responsible for assembling the tracts of land and proceeding conceptual site plan approval with the city of Highland Village. Demolition at the project site is scheduled for this month, with a potential groundbreaking date set for May. Delivery date for tenants is set for spring to summer 2007, and Regency Centers expects the grand opening of the $98 million project to be October 2007.

Miller believes that his company has found the right mix for the project to thrive. “Because of the quality of development and the line-up of tenants coupled with the demographics, it should be a very successful shopping center,” he says.

Frisco Square

The residents of Frisco, Texas, are already welcoming a development that will eventually span 147 acres. Frisco Square, a mixed-use lifestyle center located on the southeast corner of Main Street (FM 720) and the Dallas North Tollway, currently has 250,000 square feet in existence and will quadruple to approximately 1 million square feet in the next 2 years. The development is expected to reach full build-out during the next 5 to 7 years.

“It is a true mixed-use development. Most of the retail space sits on the ground floor of office or residential buildings. Throughout the day and evening, the project will have high energy from the variety of tenants,” says Brant Bryan, a managing partner of Fairways Frisco, the partnership that owns Frisco Square.

Frisco Square will bring 550,000 square feet of retail to Frisco, Texas. The mixed-use project, which also features residential, office and municipal space, will reach full build-out in the next 5 to 7 years.

“We're looking for a lot of the specialty lifestyle tenants, which include fashion accessories, apparel, junior apparel, specialty foods and specialty shops,” Bryan says. “It's very broad because it's a very big project.”

In addition to the 550,000-square-foot retail portion, which will be built during the next 3 years, Frisco Square will feature 1.5 million square feet of office space, 1,600 apartments, 500 townhomes/stacked flats/condominiums and 110,000 square feet of municipal space, including the new home of Frisco's city hall, library and heritage center. Frisco Square also is located directly across Main Street from Pizza Hut Park, the world's largest soccer complex and home to Dallas' professional soccer team, FC Dallas. As a result, Bryan expects a large draw for the retail development.

“Frisco Square draws from a really big trade area. The target will be Frisco, the towns of Prosper and Little Elm as well as the residents of West Plano. Because the development really is an urban environment, there will also be several thousand people who will work there every day. We will have a large number of apartments and townhomes in the project. We will draw from the large trade area as well as those who live and work there,” Bryan says.

The Frisco Square architecture, which is being provided by RTKL, focuses on turn-of-the century style and pedestrian-friendly amenities. “We have numerous parks and public spaces scattered throughout the project. The city is putting in a world class City Plaza that will have a water feature, a pavilion and verandas,” says Bryan. “It is designed to be the gathering place for the city of Frisco.”   

Bryan expects Frisco Square to be very successful in the area. “The project sits literally at Main and Main, a prime location for one of the high-growth areas of the nation. The architecture and design is designed to be extremely friendly and interesting to pedestrians. It's going to be an inviting environment where people want to be.”

Villages of Green Heath

Villages of Green LP and Shepherd Financial Corporation are testing a retail prototype in Heath, Texas. The intent is to bring open-air, community-oriented shopping destinations to under-retailed suburbs of major cities, and the first, Villages of Green Heath, will reach the growing community of Heath in Rockwall County, outside of Dallas. Villages of Green will later be developed outside an additional five to seven cities, including the suburbs of Chicago, Atlanta and Washington, D.C., in the next 5 years.

“All of our sites are deliberately situated outside major cities in counties holding the highest growth nationally. These target locations are currently under-retailed due to the unusual nature of the demographics as well as their incredible growth rates,” says Julie Knisely, a partner of Villages of Green LP. “We're trying to get into pockets where we know the traffic counts will be where we need them in 2 years, but the areas are currently under the radar. It's a perfect scenario for us; we can be extremely selective about who our tenants are going to be.”

The 89,000-square-foot Villages of Green Heath, which is located near the intersection of 1170 and 740 off of Interstate 30, will offer retailers a chance to control how they develop. “We are offering our manufacturers the chance to be a part of something entirely new: the chance to retail themselves,” Knisely says. “We're trying to attract a very upscale, yet unique clientele. Some of our tenants are new to the United States. They are companies that have great brand recognition globally via catalogue or through wholesale relationships with other retailers but have not yet gone to bricks and mortar.”

Retail categories at the 14-building Villages of Green Heath will include an organic market, an art gallery, a bookstore, a coffee shop/bakery, an ice-cream shop, a candy shop, an interior design space, a toy store and well-known clothing retailers for children and women.

The architecture, which is being designed by Smith & Ekblad, will offer the community an aesthetically pleasing place to shop. The intention is to create an atmosphere in which people will feel comfortable spending the afternoon instead of just rushing in to make a purchase before quickly leaving.

Villages of Green Heath, which has not yet broken ground, is scheduled to open fall 2007.

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