Highland Plans $35M Retail Development

Highland is in the entitlement process and hopes to break ground on the first phase in the first quarter of 2009 with completion of that phase in the third quarter of 2009. The company hopes to announce the names of the specialty market and drug store in the next 30 days.

The new ground-up project will be developed on a 14.3-acre site that is bounded by Caldwell and Kimball avenues and West and Court streets. The second phase is proposed for a site of more than 3.7 acres at the northeast corner of Kimball Avenue and West Street.

Caldwell Avenue is a busy thoroughfare running east from Highway 99 through the south part of Visalia, notes Michael Singelyn, senior director of development for Highland. Numerous new residential communities and several retail shopping centers have been built recently in the surrounding area to accommodate increasing demand, he adds.

Other factors driving Highland's decision to develop the center include the City of Visalia's strong population and income level growth over the past decade. Singelyn notes that the city's population as of 2006 was 114,835, having grown more than 25% since 2000.

At the same time, the median household income in Visalia has grown from $41,349 to $51,870. "This is an ideal site for expansion-minded retailers and restaurant chains," Singelyn observes.

Highland has named CB Richard Ellis in Bakersfield for marketing, leasing and parcel sales for the project. CBRE's Duane Keathley, Vincent Roche and Alex Bendlin are the leasing and sales agents. Benson & Bohl of San Diego is the project's designer.

In addition to the company's Visalia project, Highland has more than one million sf in various stages of development or redevelopment, including a variety of projects in California and a 375,000-sf project in Phoenix. Singelyn points out that the company, which has nearly completed construction of an 84,500-sf mixed-use retail/office project in Bakersfield, is "aggressively looking for new opportunities in the West."

According to Singelyn, "although the market may be slowing down, Highland Development's thirst for new projects is not." He says that the Pasadena-based firm's development strategy includes both ground-up shopping center development and acquisition of existing properties with value-add and/or parcelization opportunities.

Highland is looking for sites of anywhere from two acres on up in the Western US, Singelyn says. The company plans to spend $150 million to $200 million on development projects during the next few years.