Leasing Momentum Prods Developer to Start Talks for Expansion Land

LEAGUE CITY, TX-With a Wal-Mart Supercenter pushing for a summer delivery, a Greater Houston developer has put an additional seven acres under contract to expand its 60-acre Bay Colony Town Center. As the deal works toward fruition, the under-construction second phase of three pad sites and 95,000 sf of junior anchor space has landed Chili's Grill & Bar, Taco Cabana and Petco.

Chili's ground leased a 74,863-sf pad site for 10 years while Taco Cabana took a 31,423-sf pad with a 15-year lease and Petco grabbed a 15,000-sf junior box site with a 10-year contract, says Heather Nguyen, vice president for NewQuest Properties Inc. The trio is pushing to open doors in midsummer in the 2955 Gulf Freeway development.

Nguyen tells GlobeSt.com that NewQuest is holding a contract for abutting land to add two more restaurant pad sites and 75,000 sf of professional office space to the 300,000-sf-plus Bay Colony Town Center. She says the third phase could break ground by year's end and deliver in midyear 2007. But, she says, the plan's been altered before to meet demand.

Nguyen says the original plan was to start the second phase at the end of this year with leases in hand for the bulk of the class A space. "We were working to do it all at one time, but the tenants are pushing it because Wal-Mart is going to open in the summer," she says. Now, she and NewQuest leasing associate Rebecca Nguyen are courting banks for the remaining pad site and negotiating a lease for 35,000 sf of the 80,000-sf balance of junior anchor space.

With the leases signed, work has started on buildings for Chili's and Petco. Nguyen says Taco Cabana's construction should begin within 30 days. Jim Smith with Staubach Co.'s local retail group represented Chili's while Chad Moss with Property Commerce, another local firm, negotiated the Taco Cabana lease. NewQuest principal Jay Sears brokered the Petco lease.

NewQuest's League City land sits at the intersection of Interstate 45 and FM 646, just south of the Big League Dreams baseball complex and at the heart of a fast-growing residential pocket. "It's been a great market," Nguyen says. "The large players are starting to come. The retailers are realizing it's a different market than Baybrook and a good second location." Inline space in the immediate area is carrying quotes of $22 per sf to $26 per sf.