JV Pencils May Start for $80M Second Phase

KATY, TX-With its first retail phase 60% preleased, Vista Equities Group and its Denver-based partner, Amstar Group, will break ground on an $80-million second phase for LaCenterra at Cinco Ranch. In May, work will start on 160,000 sf of retail and 230 residential units, all planned for completion in fall 2008.

The development partners are in the process of wrapping up work on the $60-million first phase for LaCenterra, where 170,000 sf of retail and 90,000 sf of office space is delivering at 23501 Cinco Ranch Blvd. The 34-acre, 700,000-sf development got under way in late January 2006.

Woody Mann Jr., president of Houston-based Vista Equities Group, says the plan has been to develop LaCenterra in two phases, one right after the other from the beginning rather than trying for a market-driven strategy. "Phase two was in the plan all along," Mann tells GlobeSt.com. "We felt like it would be needed to create a credible mass for the area and we knew phase one wouldn't be large enough to do that."

Mann says the first phase is on track for its retail leasing as is the office component, which is 30% preleased. "Office tenants are different from retail tenants. They need to be able to see, smell and feel something before they commit," Mann explains. "We're fortunate in that we have the Katy Area Chamber of Commerce officing there. That will help drive a lot of traffic through the development."

Mann says that the first phase's retail rates range from $26 per sf to $60 per sf net, with office space starting at $26 per sf, gross. Lease rates for the second phase have not been determined.

Hermes Architects Inc. is the architect of record for LaCenterra. Hoar Construction, headquartered in Birmingham, AL, is the general contractor. Page Realty Partners Ltd. of Houston is leasing the retail space while CB Richard Ellis is overseeing the office.