Allegiance JV Adds Another Anchor to $320M Retail

Dallas-based Allegiance Development LP and equity partner, Torreon Capital LP of Austin, have mapped out a 415-acre play for a 1.2-million-sf town center, 885,000-sf retail "marketplace," 430,000 sf of inline and street retail, 300 to 500 multifamily units, 700 townhouses and brownstones, up to 250,000 sf of office and 90,000-sf convention center. The Dillard's deal is the first anchor for the town center component, which has marked a 20% preleasing notch with the deal.

Rayzor Ranch Marketplace, situated on the north side of the US Highway 380-Interstate 35 junction, has hit 50% preleasing for the 430,000 sf of inline, junior boxes and street retail, according to Randy Holcombe, Allegiance's executive vice president of retail. As a result, the marketplace will break ground in August along with a 200,000-sf Wal-Mart Supercenter and 130,000-sf Sam's Club, which bought a combined 34 acres for their stores. Town center construction gets under way in November.

If the work schedule stays on track, the marketplace's space will turn over to tenants in August 2008 to open the door for a grand opening the following October. The town center's first space should be ready for tenant finish-out in November 2008, with its grand opening penciled for March 2009.

Holcombe is marketing the town center piece while John Zikos, partner in Dallas-based Venture Commercial Real Estate LLC, is the point man for the marketplace. "We've been pleasantly surprised," Holcombe tells GlobeSt.com about the groundswell of interest. "And, the level of merchandising is something new to Denton that we're delivering."

Dillard's executive team has yet to publicly say if it will shutter a 130,000-sf store in nearby Golden Triangle Mall, also along I-35; Holcombe's not talking about it either. All he will say is the Little Rock, AR-based retailer bought a 10-acre site for a store larger than its existing one. "Denton is growing rapidly," he says, "and our trade area is growing rapidly."

The retail strategy aims to provide something for everyone at all spending levels in a two-university city midway between Dallas and the Oklahoma line. Holcombe says the town center will be seeded with high-end "mall-type" fashion and entertainment names and the marketplace will be filled with other fashion stores and home furnishing shops. The present groundwork includes negotiations with a home improvement chain for land on the marketplace side.

Little Rock-based VCC Construction Co. is the town center's general contractor. The marketplace's builder has yet to be picked. OmniPlan Inc. of Dallas designed the town center; Hodges & Associates, also Dallas, created the marketplace design.

Rayzor Ranch will take five to seven years to build out. It is projected to generate $484 million in tax revenue for Denton County in the next three decades.