$150M Expansion Brewing for $241M Mixed Use

ROSENBERG, TX-NewQuest Properties, with a $241-million, mixed-use project under construction, has acquired another 125 acres right across the freeway to expand its one-million-sf-plus gateway at the Richmond-Rosenberg border. The plan will add 700,000 sf of retail, 370 residential units and 100,000 sf of professional and medical office space.

David Meyers, NewQuest development partner and leasing director, tells GlobeSt.com that the first construction will begin in March 2007 on Brazos Commons, an estimated $150-million expansion to the 430-acre Brazos Town Center along US Highway 59. "I think there's a fair amount of anchor tenants out there that's seeing the growth and power that we've put there and are now starting to reconsider," he says.

Brazos Town Center, which broke ground in July 2005, is pushing 95% occupancy of built and under-construction retail space. In its latest leasing rally, 14 tenants have roped off 149,301 sf for the lineup of the industry's top names. At build-out, Brazos Town Center will have 140 acres with more than one million sf of retail and a 290-acre balance with 600 high-end apartments; 330 single-family homes; 251 patio homes, 152 townhouses and a professional office complex.

"We are probably 18 months ahead of schedule on Brazos Town Center," Meyers says. "We are very happy to see that come together as it did. We've put together a good lineup and good co-tenants. It really builds power." The project has nine anchors and 34 pad sites, with just seven left to fill.

Brazos Commons is a testament to the momentum that NewQuest, the sole owner, has built at the crossroads of US Highway 59 and FM 2977. The land is about nine miles southeast of its closest regional competitor, First Colony Mall in Sugar Land, so it stands up to national retailers' test for distance between stores. The expansion land was bought from Tri Star Real Estate Investments Inc., which had Spencer Stone of Primetex Realty Group from Katy bargaining against NewQuest's Steven D. Alvis.

"Once Brazos Town Center started to stabilize and anchors were lining up, and we were confident in our leasing efforts, it only made sense to jump across the freeway," Meyers says, adding the same team is in place to design and build the expansion. CDA Architects, Axiom Construction Co. and KGA Landscape Architects, all from Houston, are waiting to begin.

Meyers says the first anchor pad site will be turned over in the spring to Academy Sports & Outdoors. The 83,500-sf store is slated to open in Q3. "We will do our best to try to time additional anchors with Academy," he says, "but more than likely the majority of the balance will be opening in first quarter 2008."

NewQuest plans to earmark 80 of the 125 just-bought acres for retail, carving out 30 pad sites, of which 23 will be freeway-fronting. All pad sites are ticketed as ground leases. In the development area, a ground lease, on average, is fetching a $160,000 annual rent. Inline space is quoted at $21 per sf to $28 per sf. Meyers says 15 to 18 acres are set aside for apartment development and the balance for office projects. With rooftops and retail rising or planned to rise all around, Meyers and vice president Erik Walker are negotiating with two grocery chains for the lineup--and the win will go to just one of the centers.