Packaging the deal as a build-to-suit, 24 Hour Fitness has inked a 15-year ground lease, with options to extend, for a 3.5-acre tract in Katy Crossing, an 8.5-acre plan near the intersection of US Hwy. 377 and Golden Triangle Boulevard. The deal was under negotiation about six months.
"We feel very strongly about the Keller community. It's very family oriented. It's the perfect fit," John Eiskamp, 24 Hour Fitness' director of real estate, says about the site selection for one of the chain's first "family sport clubs" in the region.
Eiskamp says the family sport club's business plan calls for construction of "three to five per year for three years" in the three Texas metros. The company's broker, Jeff Kittleson, senior vice president in Dallas for CB Richard Ellis, also has closed a build-to-suit deal in Murphy, another bedroom community in the region.
Scott Rose, leasing director for Cross Leasing Group, tells GlobeSt.com that permitting is under way for the project. The 24 Hour Fitness prototype totals 42,519 sf, with an outdoor 10,000-sf amenities area that includes several types of swimming pools. The rest of the plan calls for a 19,000-sf shopping center to be filled with health-oriented retailers and restaurants, including a nationally branded coffee shop, to complement its anchor. The plan is to bring it all out of the ground at once, with delivery of space to tenants penciled for April 2008. If all goes as planned, Katy Crossing will be open for business in August 2008.
"We've had a lot of initial interest," Rose says, adding marketing has barely started. "We anticipate the shopping center will prelease quickly." Katy Crossing, which has two drive-through end caps, is being quoted at $20 per sf to $25 per sf, triple net.
With 24 Hour Fitness promoting a family-oriented concept, Katy Crossing's neighbors set up the perfect storm: 245-lot Village of Woodland Springs, 648-lot Timberland Estates and 809-lot McPherson Ranch. The retail and residential corridor also includes two national grocery chains, Kohl's and Home Depot.Cross Development, led by Casey Shires, acquired the development site in May. General contracting and architecture are handled in-house. Alderman/Paccone Architects of Austin designed the 24 Hour Fitness Family Sport Club prototype.
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