Crittenden Developers Bag Groceries 9-18-08 CDC

8/8/2019 Crittenden Developers Bag Groceries 9-18-08 CDC

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Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright 2008 Crittenden Research, Inc.

CRITTENDEN

REAL ESTATE DEVELOPERSCrittenden Research, Inc. P.O. Box 1150 Novato, CA 94948 Customer Service: (800) 421-3483

Vol. 8, No. 18 September 15, 2008

Developers Bag GroceriesTri-land Properties, HarwoodInternational, Hanover Co. and AvalonBay Communities Inc.underscore grocery-anchored sites in upcoming multi-use projects, even with options for grocer tenantsincreasing and vacancies rising. Redevelopment of a large grocer is the answer for Tri-Lands $30MBrywood Center in east Kansas City, Mo. Harwood sees the strategic importance of bringing a high-endgrocery retailer to its $150M The Square mixed-use tower, which is a component of massive project inUptown Dallas. A Whole Foods will be the anchor for Hanovers $500M pedestrian friendly projectin Uptown Houston. AvalonBay brings the first apartment building over a grocery store on Seattlesoffice-heavy Eastside.

Developers think about grocery retail before anything else because they can shape the customer base for anentire project and the surrounding area. High volume markets can generate high traffic to the center withnearly 10 thousand transactions or more a day. Developers know brands make a difference, so it makessense to tap high-end retailers like Whole Foods and Sunnyvale Market in order to raise leasing costs, butright now these brands have a lot of choices and need to be romanced. The glut of retail development overthe past few years has left a lot of vacancies giving grocery brands plenty of options. Vacancy in thegrocery-anchored segment climbs toward 8%, the highest in close to 10 years. So even with retaildevelopment deliveries expected to drop to almost 10% in 2009, over this years 8.2% expected figure, itmight not be time to just pounce on the next strip center thinking you can land a top grocery brand. Manybig players are pushing a lot of projects to the 2009 pipeline. Regency Centers bumped close to $300Mworth of projects to a shadow pipeline for 2010 and 2011, and very little is on tap for 2009. Four of thoseprojects are grocery-anchored retail developments, which are supposed to be the one stalwart that retaildevelopers can count on. For Tri-land, Harwood, and AvalonBay, redevelopment, niche locations and

large mixed-use projects might be the key. Each are making their grocery-anchored centers a part of highprofile projects that can catch or already have caught strong tenant interest.

Tri-land aims to profit with an 180,000-s.f. grocery anchored Brywood Center, in east Kansas City, Mo.Avoiding the costs of new construction and targeting the existing clientele in the area, EVP HughRobinson will renovate and expand the centers Price Chopper. Plans will also include an 80,000-s.f.second anchor and about 20,000 s.f. of small shops. Upon completion, the development is set to have from270,000 s.f. to 280,0000 s.f. of retail space. Expect dirt to push in the first quarter of 2009 and a two- tothree- year gap before the second anchor comes online. Tri-land will receive $5.7M in Tax IncrementFinancing. The company expands its grocery strategy to Georgia with a $42M project set to come online inQ2 2009. The Crossings at Four Corners in Smyrna, spanning 220,000 s.f. to 250,000 s.f., will also beanchored by a new food store. Current blueprints indicate a 30,000-s.f. junior anchor and some out parcels

Apartments over an 8,000-s.f. Sunnyvale Market is the key to Harwoods roughly $150M, 33-storymixed-use development in Uptown Dallas. The 400,000-s.f. The Square will make up the seventh phase ofthe 17-phase, $4B Harwood District MPC in Uptown Dallas. The tower will have 254 apartmentsabovethe upscale grocer. Nearly 33,000 s.f. of retail space will include three to five restaurants rounding out themix. With over 13,000 people expected to be within walking distance, VP of Development Spence Sowaknows the potential of introducing a high-end retailer to the area. He draws inspiration from his study tripof at least 15 New York neighborhoods and aims to adopt that city feel to this big development. TheSunnyvale Market will become Uptowns first high-end, gourmet grocery store that will not carrytraditional staple goods. It will be more of a take-away spot where tenants can stop by for their dailynecessities and gourmet food to go. Anticipate groundbreaking late 2009. Harwood is currently pouringconcrete for an office development for the St. Anne Court project in the MPC.

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Developers Bag Groceries Continued from Page 1

Hanover Co. partners with MetLife Inc. and Wulfe & Co. to develop a 37-story, 237-unit luxury tower inthe BLVD Place mixed-use project in Houston. The $500M project is set to include 500,000 s.f. of retailspace anchored by an 80,000-s.f. Whole Foods Market. Expect groundbreaking for the pedestrian friendlyproject in the heart of Uptown Houston this fall with a completion somewhere in 2011. BLVD Place willalso include a five-star, high-rise condo-hotel and 250,000 s.f. of office space. The 1.45-acre site willinclude a private residential lounge with a catering kitchen, theater, library, fitness club and a 19,000-s.f.

rooftop terrace.

AvalonBay capitalizes on the growing Bellevue, Wash., submarket that holds the second-largestconcentration of office space in the Seattle market. The $80M Avalon Meydenbauer features 368 unitsatop a 57,000-s.f. Safeway. VP of Development Brian Fritz intends to attract young professionals andempty nesters. Apartment rents should range from $1,125/month to $2,860/month. Expect AvalonBay topursue other urban apartment/grocery, high-density projects in the market.

Large Plate Users Could Be Vacancy AnswerOffice vacancies rise in many markets, but demand for large-user space remains steady. CapstoneQuadrangle along with VK Development, Opus Northwest and Cortland County Industrial

Development Agency (CCIA) jump in to business park projects anchored by office towers catering to bigcompanies that usually set deep roots. Capstone plans over 650,000 s.f. of office space in VKs over$200M mixed-use project in Brookfield, Wis. Opus Northwest will spend $80M on Opus CorporatePark I and II in Chesterfield, Mo. The project will capitalize on the strong Class-A market in the St. Louissuburb. CCIA targets large-end users for its Finger Lakes East Business Parkdevelopment inCortlandville, N.Y., a university market ripe for new corporations looking to make a home.

Now that the national office vacancy rate hovers around 15%, you would expect developers to back offlarge office projects, especially Class-A developments targeting tenants with enormous space needs. Butcertain regions have a void in large space and some bigger companies are less affected by a strugglingeconomy. Large corporations looking to expand are on the search for bigger parcels, while cities anddevelopers court these mammoth companies to secure steady tenant base, as well as infuse the localeconomy on a more permanent basis. In an effort to draw businesses to the area, some counties such as

Cortland County offer tax incentives for expanding into these office developments. Capstone and OpusNorthwest target office tenants with space needs between 35,000 s.f. and 173,000 s.f., while CCIA projectcan accommodate companies with large acreage needs in its project.

Capstones strategy for the 66-acre Percheron Square in Brookfield calls for buildings ranging from100,000 s.f. to 130,000 s.f. aimed at large corporate tenants who can lease up to two-thirds of the buildingat once. Count on Capstone Quadrangle to develop the majority of the office development in VKs $200Mto $250M mixed-use project, which weighs heavily on the office component. Although VK Developmentwill do the necessary zoning for the Planned Development District, as well as the infrastructure for thewhole property, each parcel will be sold off to different developers who will take charge of each individual project. Capstone Principal Paul Quickplans up to 650,000 s.f. of office space to be built on 16 acres.Targeting mostly large Class-A product, this component should be completed within a year of breakingground. Although there is a high vacancy rate in the office market right now, there is a scarcity of large

spaces. While no tenants have been signed yet, several large corporations are poking around.

Presidentof VK Development Ajay Kuttempoor lines up other developers besides Capstone Quadrangle,such as Outlook Development, Endeavor Development, Sunrise Senior Living and Ryan Companies forPhase I. This phase is made up of six parts and is expected to break ground in Spring 2009 with a finalbuildout expected to be anywhere from five to seven years depending on each developer.

Opus Northwest revs up its presence in the Chesterfield market with the 14-acre Opus Corporate Park I andII. Tenants will be able to rent space for as little as one-floor plate at 34,600 s.f. on up to a completebuilding penciling out to 172,500 s.f. The project will be the companys second investment in the suburbanmarket after the highly successful One Chesterfield Place development.



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Large Plate Users Could Be Vacancy Answer Continued from Page 2

Opus Northwest Director of Real Estate Development John Langa has reason to be pleased with OneChesterfield Place, which is posting higher rents while vacancies drop. The market overall sees higherrents as well and the vacancy rate is below 6% for the first time since 1998. Covering Opus Northwests14-acre site will be two 5-story office buildings, aimed at large plate users. The company intends to beginconstruction in May 2009 on the first building, followed by production on the second within 18 months.Anticipate a 12-month construction period for each. While Opus has not secured any tenants so far, talks

with several prospective companies are serious. Although the company looks to sign tenants beforeconstruction, they will move ahead regardless.

CCIAs Finger Lakes East Business Park targets commercial and light industrial development.Executive DirectorTom Gillson positions the 127-acre development to cater to the lack of inventory inthe area. Cortland County needs to accommodate company expansions and recruit new companies whomay even qualify for tax incentives upon moving. With groundbreaking scheduled for late Spring 2009,Gillson believes it will take four to five years to reach buildout. Cortland County will financeapproximately $4M for the infrastructure. Although Courtland itself has a population of about 48,000,the business park is geographically surrounded by Cornell University, Ithaca College, Syracuse Universityand Cortland University. The proximity to these universities will prove beneficial to this project as tenantscan tap a qualified workforce of fresh graduates and a wealth of knowledge to couple their investments.

Competitively priced at an average of $16K/acre, and letter of commitments being made already withmajor tenants in the works, Gillson sees good things to come.

TODs Gain MomentumMeta HousingCorp. and Icon Partners hop aboard mixed-use TODs filling market gaps near publictransit. Such projects catch the eye of state officials who not only give their approval but also providefinancial backing. Meta Housings $190M Long Beach Station caters to the needs of the seniorcommunity with a retail anchored and residential TOD. Icon Partners SVP Marc Sullivan looks to servecorporations with large Class-A office needs at its $560M Las Colinas Station TOD in Irving, Texas.

Tenant demand, whether it is corporate or residential, increases near public transportation as train and buslines extend further into the suburbs. Developers and tenants stick close to locations highly accessible to

public transportation in order to tap a variety of folks, from workforce to retirees. Incorporating a lot ofoffice space into TODs guarantees better leasing percentages. Companies looking to expand realize thatcloseness to public transportation will not only provide a better and more easily accessible workforcebut also decrease demand for parking a daunting expense and drop the overall cost of leasingper square foot.

Projects that do not directly incorporate office space provide access to transportation leading directly toworkforce areas such as city downtowns or urban cores. Such mixed-use developments are increasing,providing more affordable housing for typical commuters. Because each of these projects fulfills acomponent integral to make transportation viable they will each benefit from public fundingfrom transportations agencies. Meta Housing seeks a combination of equity from public agencies andbonds to add to its private equity placement and Icon expects to gain funds from state and localtransportation agencies.

Meta Housings 3.7-acre Long Beach Station is currently in the planning stages and aims to break groundin June 2009. The TOD will feature 145 affordable senior housing rentals to mimic the success of thefirms Burbank Senior Artist Colony in Burbank, Calif. Look for 210 for-sale condos for familiesearning 50% or less of the area mean income. The company counts on a senior population in the marketthat avoids driving and relies heavily on public transportation. Meta Housing also plans 80,000 s.f. of retaiin the mix. No pre-leasing has been arranged yet but Assistant Project Manager and Director of CorporateMarketing Nancy Morris hopes for a grocery store to anchor one of two large spots. She also aims toinclude a variety of smaller shops and restaurants to expand upon the large resurgence currently takingplace in Long Beach, Calif. With construction expected take anywhere from 18 months to two years, lookfor buildout by Summer 2011.



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Tods Gain Momentum Continued from Page 3

Meta Housings Long Beach Station will be directly across the street from the Los Angles bound MetroBlue Line light rail station run by the Los Angles County Metropolitan Transportation Authority. Twoother bus stops also pass directly in front of the development. Meta-Housing hopes to acquire the full$17M of available money for TOD funding through Proposition 1C from The California Department ofHousing and Transportation. The Long Beach Development Housing Company provides the loans to buythe land. Private equity and 4% bonds come from California Tax Credit Allocation Committee.

Icons 9.75-acre mixed-use TOD will take up nearly 1.5 million s.f. of occupied space in the Las ColinasMPC in Irving. The DART will connect Las Colinas with Downtown Dallas, once completed in 2011.With no new Class-A office development in Irving for more than 20 years, Icon is strategically wellpositioned to take advantage of the heavy rider ship to the area. Large corporations will be targeted tolease out much of the commercial space. Set to break ground in the first quarter of 2009, Phase I includes a12-story office building totaling 330,000 s.f. and a 26-story residential building totaling 260,000 s.f. PhaseII will incorporate another 260,000-s.f. residential tower, a 330,000-s.f. office tower and a hotel. Anticipatea 26-month construction period on the first phase. Wary of the unstable market, Icon will wait for Phase Ito be fully completed before embarking on the subsequent phases. Chances are Phase II will not startbefore 2013. With limited plans to include retail in the mix, Icon banks on the 300,000-s.f. retail spacegoing up just west of the site in the Water Street project by Urban Partners and Gables Residential thatis set to open fall of 2010. Icon Partners will receive funding from the Transport Innovation Fund fromlocal jurisdictions and plans to finance the rest through conventional means.

Strong Demand Generators Spark PreleasingLillibridge Healthcare Real Estate Trust, BremnerDuke, Sky Development, Capital PartnersDevelopment Group and Rockefeller Group Development Corporation count on big demand generatorsto bring in higher preleasing rates and eventually higher ROIs for their medical office projects. Lillibridgehas an $18M facility in the works in Florida, while BremnerDuke eyes a $20.4M project also in theSunshine State. Sky Development brings a much-needed brand new $50M medical office project toPembrook Pines, Fla. On the West Coast, Capital Partners and Rockefeller Group team up to target U.S.Marines with a $35M project in Oceanside, Calif.

By working with state-of-the-art healthcare facilities, fitness centers, local hospitals, or a markets uniqueneeds, medical office developers are listening and responding to the tunes of each markets requirements;and it is turning into strong preleasing commitments for their projects. BremnerDukes 90,000-s.f.development has the lowest preleasing of these three projects at 40% and is still three months away fromgroundbreaking. Lillibridges latest medical office benefits from its proximity to a healthcare campus byposting 90% preleasing rates. The nearby Marine Base helps Capital Partners and Rockefeller obtain a100% lease rate nearly six months before dirt push.

Lillibridge Healthcare partners with local physicians to develop the $18M MOB for the new Health Firsthealthcare campus in Viera, Fla. Health First owns the land but has leased the parcel to Lillibridge for thepurpose of this office building. Another recent trend joining fitness centers and hospitals should reelin a lot of doctor and patient demand. The 76,000-s.f. building is immediately adjacent to and connectedwith a pedestrian courtyard to Health Firsts new $21M fitness center and $175M hospital making for easyaccess to the medical offices. Lillibridge VP of Development Damien Donatiprojects aJanuary 2009 startdate and completion slated for January 2010. Lillibridges in-house design and space planners customdesigned floor plans to allow physicians to gain more efficiency in their practice to possibly save onsquare footage or increased patient throughput. There is also room for more development on the campus.

Housing sale increases spark in BremnerDukes $20.4M medical office facility in Trinity, Fla. VP ofFlorida Lori Lingenfelter anticipates the need for more medical space to compete with the constantlygrowing population of the area. Keeping consistent with its role as healthcare developers, BremnerDuketeams with what will soon be Trinity Hospital (formerly known as Community Hospital) as part of areplacement hospital project. Built in one phase, the four-story building is expected to break ground by theend of 2008 and be fully builtout and ready for occupancy by Spring 2010. Continued on Page 6


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CONTACTS

AvalonBay Communities, Inc. (Seattle Office): 11808 Northup Way, Suite W311, Bellevue, WA 98005. Brian Fritz,VP of Development, (425) 576-2100, fax (425) 576-8447. [email protected]

BremnerDuke Healthcare Real Estate: 10150 Highland Manor Drive, Suite 150, Tampa, FL 33610. Lori Lingenfelter,VP Florida, (813) 635-8512, fax (813) 635-8560. [email protected]

Capital Partners Development Group: 2890 Kilgore Road, Suite 115, Rancho Cordova, CA 95670-6152. John Buckel,

Senior Partner, (916) 851- 9800, fax (916) 851-9850. [email protected]

Capstone Quadrangle: N17 W24222 Riverwood Drive, Suite 160, Waukesha, Wisconsin 53188-1134. Paul Quick, Principal,(262) 523-1122, fax (262) 523-1199. [email protected]

Carlyle Group, The: 520 Madison Ave., New York, NY 10022. Louis V. Gerstner, Jr., Chairman, (212) 381-4900,fax (212) 381-4901. [email protected]

Colonial Properties Trust: 2101 Sixth Ave., Suite 750, Birmingham, AL 35203. Ken Marshall, SVP of Development,(813) 476-0655. [email protected]

Courtland County Industrial Development Agency: 37 Church St., Cortland, NY 13045. Tom Gillson, Executive Director,(607) 756-5005, fax (607) 756- 7901. [email protected]

Equity, Inc.: 100 E. Wilson Bridge Road, Suite 200, Worthington, OH 43085. Shad Phipps, Development Officer,(614) 802-2990, fax (614) 802-2901. [email protected]

Forest City (Mesa del Sol): 801 University Blvd. S.E., Suite 200, Albuquerque, NM 87106. Anne L. Monson,VP, Marketing and Public Relations, (505) 452-2600, fax (505) 452-1900. [email protected]

Gables Residential (Dallas Office): 3500 Maple Ave., Suite 435, Dallas, TX 75219. Doug Chesnut, SVP/Investments West,(214) 252-2600. [email protected]

Hanover Co.: 5847 San Felipe, Suite 3600 Houston, TX 77057. John Garibaldi, SVP of Development, (713) 267-2100,fax (713) 267-2121. [email protected]

Harwood International: 2828 N. Harwood St., Suite 1600, Harwood, Dallas, TX 75201. Spence Sowa,Director of Development, (214) 871-0871, fax (214) 468-0207. [email protected]

Icon Partners: 5050 Spring Valley, Suite 200, Dallas, TX 75244. Mark Sullivan, SVP, (972) [email protected]

Leslie Group, Inc.: 5060 Parkcenter Ave., Suite B, Dublin, OH 43017. Ron Leslie, President, (614) 760-0701,fax (614) 760-0705. www.leslie-group.com

Lillibridge Healthcare Real Estate Trust: 200 W. Madison St., 32nd Floor, Chicago, IL 60606-3417. Damien Donati,VP of Development, Chicago Office, (312) 408-1370; Atlanta Office, (678) 965-4926. [email protected]

Meta Housing Corp.: 1640 S. Sepulveda Blvd., Suite 425, Los Angeles, CA 90025. Nancy Morris,Assistant Project Manager/Director of Corporate Marketing, (310) 575-3543, fax (310) [email protected]

Metlife, Inc: 10 Park Ave., Morristown, NJ 07960. Robert Merck, Head of Real Estate Investments, (973) 355-4449,fax (973) 355-4460. [email protected]

Molina Healthcare: 8801 Horizon Blvd. N.E., Albuquerque, NM 87113. Sharon Huerta, Director of Government Contracts,(505) 348-1543; Kathleen O'Guin, Director of Public Relations, (562) 951-8305. [email protected]

Opus Northwest: 10350 Bren Road W., Minnetonka, MN, 55343. John Langa, Director of Real Estate Development Northwest(952) 656-4444. [email protected]

Opus West Corp.: 2555 E. Camelback Road, Suite 800, Phoenix, AZ 85016. Lynn Gibson, Director of Retail Development,(916) 928-7527. [email protected]

Pennsylvania Real Estate Investment Trust: The Bellevue, 200 S. Broad St., Philadelphia, PA 19102. Ronald Rubin, CEO,(215) 875-0700. [email protected]


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CONTACTS

RED Development LLC: 4717 Central, Kansas City, MO 64112. Michael Ebert, Partner; Dan Lowe, Managing Partner,(816) 777-3500. [email protected] [email protected]

Rockefeller Group Development Corp.: 4 Park Plaza, Suite 840, Irvine, CA 92614. Tom McCormick, SVP/RegionalDevelopment Officer, (949) 468-1801. [email protected]

Sky Development: 2999 N.E. 191st St., Penthouse 2, Aventura, FL 33180. Gavin Susman, Chief Operating Officer,

(305) 933- 4646 fax (305) 933- 4645. [email protected]

Tri-land Properties Inc.: 1 Westbrook Corporate Center, Suite 520, Westchester, IL 60154. Hugh Robinson, EVP,(708) 531-8210, fax (708) 531-8217. [email protected]

Urban Partners: 304 S. Broadway, Suite 400, Los Angeles, CA 90013. Denise Mendoza, Principal Executive Assistant,(213) 437-0470, fax (213) 437-0474. [email protected]

VK Development: 19275 W. Capitol Drive, Suite 100, Brookfield, WI 53045. Ajay Kuttemperoor, President, (262) 790-6000,fax (262) 790-6010. [email protected]

Wulfe & Co.: 12 Greenway Plaza, Suite 1500, Houston, TX 77046. E.D. Wulfe, President/Principal, (713) 621- 1700,fax (713) 621- 3244. [email protected]

Zaremba Group LLC: 14600 Detroit Ave., Cleveland, OH 44107. Walter Zaremba, Chairman/CEO, (216) 221-6600,

fax (216) 221-9742.

Strong Demand Generators Spark Preleasing Continued from Page 4

Park Plaza Professional Center in Pembroke Pines, Fla., by Sky Developmentwill bring two 80,000-s.f.medical office buildings over 9.6 acres of land. Strategically located near Memorial Hospital, which Skyalso owns, the $50M Park Plaza will generate traffic from hospital patients. With the only medical officesin the market growing increasingly older and out of shape, a need for development of this nature is needed.Skys development of the first green medical buildings in South Florida will incorporate a PhysicianOwnership Program for those who want to become Shareholders in the LLC that owns the building. Thefirst building, which has letters of intent for over 50% of leaseable space, will lease for $24/s.f. triple netand targets tenants of all aspects of the medical industry; not only doctors but research companies and even

a pharmacy, who was the first to sign a LOI. Construction is set to start the fourth quarter of this year onthe first building and will start on the second building when it is 50% leased. With a construction timeexpected to take 12 to14 months, count on the medical offices to be ready by late 2009 early 2010.

Capital Partners Development Company and Rockefeller plan to build a $35M, 84,000-s.f. Veterans Affairsoutpatient clinic at the Seagate Corporate Center in Oceanside, Calif. Capital Partners ProjectDevelopment ManagerJohn Buckel and Rockefeller Senior VP of Development Tom McCormickhint ata February 2009 dirt push for the two-story medical clinic. Catering to Marines living in North San DiegoCounty, the 8.5-acre built-to-suit project is minutes from the Marine Corps Base at Camp Pendleton.

Shaking Up The Retail Anchor MixEquity Inc., Opus WestCorp. and Colonial Properties Trust (CPT) beef up their retail pipelines withbig-box anchored projects. Equity teams with Leslie Group Inc., for the almost $60M retail GatewayPlaza Eastproject in Delaware, Ohio. Opus West targets a mix of big box and junior big-box anchors forthe $100M Jacuzzi Ranch in Antioch, Calif. Two massive department stores anchor CPTs $100M-plusColonial Pinnacle at Cross Creekin Tallahassee, Fla. a retail-starved primary market.

With demand so low, developers have let their preleasing rates drop to 50% or lower before constructionkicks in, but some even struggle to reach that. So, the need for big-box anchors is even higher if Equity,Opus West and CPT hope to have retailers on board before shovels strike. Diversifying with more junioranchors like Opus West plans with Jacuzzi Ranch is an interesting strategy. Others might want to searchhigh and low for the right spot like CPT did for its Tallahassee project, which sits in a region with not muchin the way of new retail development in nearly 25 years. Continued on Next Page


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Shaking Up The Retail Anchor Mix Continued from Page 6

Equity Inc. and the Leslie Group Inc., look to build up to 420,000 s.f., or 74 acres of retail space inGateway Plaza East in Delaware, Ohio. Development costs come in short of $60M and the project will bethe second largest retail center in the market. Partially built to suit and partially spec space, current plansinclude a big-box anchor with room for up to 240,000 s.f., a junior box of about 75,000 s.f. and roughlyseven to eight out lots. Still early in the leasing process, Equity is talking to tenants with strong interests.Equity Development OfficerShad Phipps anticipates a Spring 2009 construction start with total buildout

three years from now. Two phases are on the drawing board at the moment, with provision for moredepending on leasing trends. Although Gateway Plaza East stands as the second largest retailer in the city,its falls just 100,000 s.f. shy ofZaremba Group LLCs $60M Glennwood Commons project, whichproves to be its strongest competitor directly across the street. Glennwood Commons will be anchored bybig-box tenants like The Home Depot, Meijer, Kohls and Office Max. Equity and plan to feed off thesynergy of that development and profit from the 7% to 9% annual growth rate expected in Delaware.

Opus West plans to develop 45 acres of land for regional shopping center Jacuzzi Ranch in Antioch, Ca.The $100M project will reserve 440,000 s.f. of retail space including both big box and junior box users.Another eight to 10 additional spaces between 30,000 s.f. and 40,000 s.f. could possibly house a number ofdestination restaurants. Although plans for the development are finalized, Opus paces itself out during theslow market to avoid any losses. Waiting on other companies to develop housing nearby, tenants seemhesitant to commit to the trade area. Opus looks for a 50% pre-leasing rate before beginning construction.Regardless, Opus Director of Retail Development Lynn Gibson is confident about the projects primelocation targeting the upper middle income group in the Bay area suburb. Only community retailers servethe area, presently, and the closest regional retailers are almost 10 to 15 miles away. The yearlongconstruction process could be done in one phase, starting as early as Spring 2010. Meanwhile, the firmstays active with its Temple Gateway project in Tempe, Ariz., and Broadstone Parkway in Dallas.

Colonial Properties works through the entitlement and leasing process on its $100M Colonial Pinnacle atCross Creek in Tallahassee, Fla. the only true regional retail project in the area. Dirt should movesometime in mid-2009 and take about 18 to 20 months for buildout. More than a lifestyle center, this174-acre site will draw clientele from the entire Panhandle region, which hasnt seen significant new retailin nearly 25 years. Located at the heart of the state capital, the development will be supported by thestability of the State of Florida capital government operations, as well as students and faculty of Florida

State University. Colonial SVP of Development Ken Marshall will develop well over 900,000 s.f. ofretail, to be anchored by two 100,000-s.f. department stores. Also look for 250,000 s.f. of junior anchorsites made up of stores sizing from 20,000 s.f. to 50,000 s.f. Expect additional 300,000 s.f. of specialtyshops and 70,000 s.f. of out parcel development that could be retail or restaurants. A 65,000-s.f. movietheatre is also in the works. Still to be finalized, the project could also include 100,000 s.f. of office space,a hotel as well as a residential component. The company currently works on a similar 900,000-s.f. mixed-use project Colonial Pinnacle at Nor Du Lac in Covington, La., and plans to proceed with additionalphases of retail at projects in Alabama, Tennessee and Florida.

Digging DirtRetail players are lining up forRED Developments $400M live/work play mixed-use Akard Place in

Dallas. Nearly 60% of the retail space is either signed or under serious negotiation. Included in the $300Mfirst phase is 200,000 s.f. of retail space that looks to house a number of restaurants. Potential tenants couldinclude Blowfish Sushi, Grimaldis Pizza and The Counter Burger although nothing has been confirmed.Development ManagerBart Lowen focuses on entertainment with the retail avoiding traditional soft goodusers. Also expect two 25- to 30- story towers, a 150-key five-star full service boutique hotel and 80luxury condominiums that will feature all the amenities of the hotel. A total 600,000 s.f. of office spacewill be constructed, with 400,000 s.f. to be developed in the $1M Phase II. RED lines up financing for theproject through lenders it has long-term relationships with. To spread risk the company also likes to JV onthese large projects, so maybe keep an eye out for other players to join the party. Although the site isdirectly northwest of Granite Properties and Gables Residentials $200M project, also featuring nearly400,000 s.f. of office space and a 292-apartment tower, Bart is sure Akard Place will drive demand.Anticipate construction in spring 2009 with a 20- to 24-month construction period.



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Digging DirtMolina Healthcare joins the growing list of companies at the 12,000-acre Mesa del Sol development in

Albuquerque. Forest City Covington NM LLC, a JV between Forest City Enterprises and Covington NMLLC, will develop the healthcare companys latest 25,000-s.f. IT center. Expect the new Molina facility tocost a total of $20M the land and building accounts for $12M, equipment makes up $6M and salariesaccount for the $2M balance. Area rents go for $18.50 to $20 NNN for office space. The new IT center isbeing relocated from Long Beach, Calif., and will bring 15 to 20 jobs, adding to the existing 140 jobs atthe Molina Healthcare office in Albuquerque. Molina is the first healthcare-related company in thisMPC, but the developers intend to draw more healthcare companies to the area. Other target sectorsinclude renewable energy, technology, film, media, government and finance. The development aims toadd 450 jobs annually to the market.

The Pennsylvania Real Estate Investment Trust (PREIT) works on its second project in ChesterCounty in West Chester, Pa. Still in the early stages, the unnamed Wyeth property features roughly30 acres of prime urban infill, currently in the process of rezoning. PREIT proposes a mixed-use projectfor this urban market, given the demographics and characteristics of the region. Rough sketches include300,000 s.f. of retail, 200,000 s.f. of office space, 600 housing units and a 150-room hotel. Looking toachieve high-density levels, the project will feature small blocks and street grid plans. Its possible thecompany could push for green building for the rare brownfield redevelopment but nothing is finalized.

Extell Development Company with JV partners The Carlyle Group and RREEF AlternativeInvestments bet on Manhattans Upper West Side with a mixed-use project that will include a hotel-stylerental building, for-sale condos and retail. Word on the street indicates that the project could touch the$1B-mark. Still unnamed, the 23-story tower rental will feature 209 luxury units with plans to breakground in Spring 2009, followed by a one-year buildout. The second tower, The Alden soars high at38 stories and features a mix of luxury residences as well as 4,323 s.f. of retail space. Both towers are partof the 52-acre Riverside South Development that includes commercial space and a 27-acre waterfrontpark along the Hudson River. Extell and Carlyle secure a $613.6M loan from a consortium of nine banksled by Deutsche Bank, at about 60% LTC, and a 12% mezzanine loan. Carlyle uses part of its $950Minvestment fund Carlyle Realty Partners IVto leverage the balance.

The Real Estate Developers TeamEmail: [email protected]

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