(For more retail coverage, click GlobeSt.com/RETAIL.)
LAS VEGAS-Locally based Montecito Cos. is moving ahead with the second phase of its namesake center at the southeast corner of Durango Drive and Elkhorn Road in Northwest Las Vegas. The 102,000-sf second phase of Montecito Marketplace will consist of seven buildings including inline stores, retail pads and anchor space. New tenants will include Chili's and TJ Maxx.
When complete, the $48-million development will total 13 buildings and 207,765 sf on 19.2 acres. The six-building first phase of the project, most of which opened late last year, has 104,904 sf that is anchored by a 65,000-sf Smith's Food & Drug. Other tenants include Woodfired Pizza, Starbucks, Fed Ex Kinko's, Pizza Hut and Great Clips. The first phase is 100% leased.
Asking rents for the second phase range from $3.10 to $3.50 per sf. Daniel Adamson of RIO Real Estate has the leasing assignment. Chili's has signed a 6,000-sf ground lease for its building. TJ Maxx will occupy 29,950 sf. The developer envisions two additional anchors.
The Montecito Cos. is led by Bob Schulman and Frank Nielsen. The land investment and retail development company has holdings throughout the Southwestern US. On the retail front, the company is in various stages of development for eight shopping centers, six of which are scheduled for completion in the next 24 months. Its land holdings total 600 acres in California, Arizona and Nevada.
Montecito Marketplace is the furthest along of several Vegas-area projects Montecito Cos. has under development. Montecito SVP and development director Nick Hannon told GlobeSt.com in May that the company accumulated most of its development land more than a year ago, prior to much of the run-up in land prices over the past 12 months.
With rising construction costs and single-digit vacancy, new space that a year ago would have leased for between $2 and $3 per sf will be above $3 per sf, according to Hannon. "I think we will see a 20% to 30% increase in rental rates over the next 24 months, which exactly mirrors the same increase we've all had on land and construction costs," he said.
The largest of Montecito's retail developments in the region is Montecito Highlands, a 250,000-sf retail shopping center that will be situated on the northwest corner of Horse Drive and US-95. The center will include grocery-anchor, junior anchor, home improvement, retail, office and restaurant pads. Montecito Highlands is scheduled to break ground in the fourth quarter of 2006. Anchor leasing is now under way.
Also scheduled to break ground in the fourth quarter is Montecito Pavillion, which likely will include 175,000 sf of retail space and a 12-acre mid-rise residential development. The 30-acre development site is off the northwest corner of Tropical Way and Lamb Boulevard in North Las Vegas. Preliminary plans include a grocery anchored shopping center consisting of seven retail buildings and eight stand-alone pads. The $75-million project is slated for completion sometime during the third quarter of next year.
Already under construction is Cheyenne Pointe, a 90,000-sf retail power center that will be located on the southeast corner of Cheyenne Avenue and Civic Center Drive in North Las Vegas. Montecito officials say the $18-million project is the first large-scale retail redevelopment within the City of North Las Vegas redevelopment area. A 30,000-sf Mariana's Supermarkets will anchor the center along with three junior anchor tenants.
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