500,000-SF Retail Play Leads 84-Acre Plan

HOUSTON-Land once considered in the boonies is now a hotspot for growth as seeds are planted for the first phase of the $1-billion Vintage Park. The northwest Houston development gets under way with a 500,000-sf lifestyle center, an estimated $125-million to $150-million project.

Experts, familiar with the project, tell GlobeSt.com that the 462-acre master-planned development--the former Hewlett-Packard campus--is especially important to the area. Houston-based developer Interfin's first phase will take up 31 of the 84 acres earmarked for lifestyle projects. The center will sit on the southeast corner of the Louella Road-Texas 249 intersection. Just this month, the San Antonio-based grocery chain H-E-B made a 15-acre commitment for a 105,000-sf store. According to Interfin's Matt Waller, discussions are under way for nearly 100,000 sf. The first space will be turned over to tenants in summer 2007 for finish-outs. "The goal is to have this 100% leased by 2008," he tells GlobeSt.com.

"Preleasing hasn't been an issue here," says Curtis Henderson, a CB Richard Ellis vice president in Houston. "We're talking to a whole host of restaurants of every imaginable venue. Lifestyle tenants are looking at it too."

Henderson says the retail quotes range from the upper $20s per sf to the low $30s per sf, triple net. Tenant-improvement allowances are being quoted at $18 per sf for retailers and $30 per sf for restaurants.

The project itself is ambitious enough, but even more interesting is it's an area that was once considered "out there" and now is in demand. "If you look at an aerial, the site jumps out at you as an undeveloped area, circled by residential. This is an underserved market for upper end retail," says David Cook, executive vice president with Cushman & Wakefield of Texas Inc.'s Houston office. He represented Hewlett-Packard in the 462-acre disposition last year and Interfin in the sales of the four pad sites, which were immediately snapped up within a month of hitting the market.

"The unfortunate thing is we're out of pad sites," Cook says. "I'm convinced we could have sold 10 of them if they could have been carved out."

Henderson says tenants' interest isn't surprising because the number of residences is increasing yet there's not much high-end retail in the immediate area. "The closest thing is Willowbrook Mall, which is about 3.5 miles away," he explains. "But there's no higher-end retail around that."

Bill Forrest, senior adviser for Sperry Van Ness in Houston, says the northwest area is exploding with residential growth to fuel demand for upscale retail. "This project will likely accelerate the growth here," he adds. "It'll have an interesting effect on the population growth overall for the area."