New Retail Hub Emerging in Northeastern Suburb

Direct Development has the largest stake with 61.5 acres, where site work has started on $7 million of work to add 1.5 miles of road and three traffic signals to its mid-block claim near the junction of FM 544 and McCreary Road. Cencor Realty Services and Greenway Investment Co., both of which have been planting seeds in the market for years, have recently closed off-market deals to get a piece of the action from Direct Development's 600,000-sf plan to create a community regional retail hub.

Direct Development's Woodbridge Crossing should be going vertical by October, according to Don Bouvier, senior vice president of development and acquisitions. The drawing card is a Super Target, which is expected to be open for business in July 2009. He says the developer's long-standing relationship with Minneapolis-based Target Corp. helped to shore up the development rights to the land.

"We're there because of Target," admits Brian Glaser, president of the D/FW commercial retail division of the Weitzman Group, whose development affiliate, Cencor, bought 5.5 acres across the road from Woodbridge Crossing at one of the proposed traffic signals. The site was bought from Moss Bros. Construction Co., which has had a construction yard on the land at least 20 years.

Glaser tells GlobeSt.com that the land has been platted for three pad sites and up to 40,000 sf of retail to complement the heavily weighted mix of national and regional retailers destined for Woodbridge Crossing. "There is good tenant demand because of what's going to go across the street," he says. "We are just part of the Target equation." Cencor's in the early stages of planning, but Glaser says the project will be timed to coincide with the Minneapolis-based Target Corp.'s opening.

Greenway Investment has been working the Wylie market since 1999, with its largest project, Westgate Crossing, spanning 55 acres about 2.5 miles east of McCreary Road. To get a piece of the FM 544-McCreary action, Greenway has bought an nearly empty 12,105-sf shopping center on 1.2 acres at 3483 FM 544 from Kinsman Ventures LLC of Plano.

Mark Hardaway, a Greenway partner, says McCreary Crossing, built last year, has just one local tenant. "We're going to get it leased up and cash flowing," he says, adding negotiations already are underway for a few deals by in-house broker Thomas Glendenning. The land deal was brokered by Greenway's Benton Rutledge.

Hardaway says Greenway's team looked at the land now owned by Direct Development. But, he says they didn't have an anchor in hand so they couldn't act as quickly as their competitor plus the land price was steep. "So, we looked at other opportunities and we came across this vacant shopping center," he says.

The developers say the suburb is getting retail rents in the upper $20 per sf range. "We're seeing pretty strong demand from retailers who've previously said they weren't expanding," says Alex Gerber, vice president of leasing for Direct Development.

Gerber says deals have been made or are close to being made with Ross Dress for Less, PetsMart, Staples, Rack Room, Michaels and Kohl's. In addition, he says talks are underway with two banks to bookend Woodbridge Crossing's 11 pad sites. Also eyeing pad sites are Taco Cabana and Chick-Fil-A. Pad sites are being sold for $20 per sf to $30 per sf, with corner sites tagged at $30 per sf to $40 per sf.

"It's been a tremendously under-served market for several years," Bouvier says.Direct Development and its equity partner, Oak Brook, IL-based Inland Real Estate Group of Cos. Inc., bought the site from Herzog Development Corp., which had reserved 186 acres for retail, multifamily and recreational uses when it started to build the single-family community of Woodbridge. Bouvier says Direct Development was up against two other leading developers for the site, which has a half mile of frontage along FM 544 and sits at the kissing point of Wylie, Murphy and Sachse.

Bouvier credits Herzog with the decision to lengthen McCreary Road to Texas 78. "He had the foresight to extend McCreary Road because he knew the importance," he says. "It's very unusual for us to create our own intersection. But without McCreary Road, it's not the environment you need."