BATON ROUGE, LA-Locally based JTS, headed by founder, president and CEO JT Spinosa, has started one of its most ambitious mixed-use projects here since the company was founded in 1979. Development of the first 14-building phase of Perkins Rowe is under way after JTS closed a $170-million construction loan with Cleveland-based KeyBank Real Estate Capital.

Perkins Rowe's completion tentatively is scheduled for summer 2007. The development cost of the first phase is $200 million.

The lifestyle center will include 317 class A apartments totaling 322,932 sf, 373,018 sf of retail and 137,766 sf of office. JTS already has leased 75% or 260,000 sf of retail and 51% or 70,000 sf of office space, according to Spinosa. Wells Fargo Home Mortgage has signed a lease for 60,000 sf. JTS is leasing 10,000 sf for its own corporate offices. Construction of a freestanding 20,400-sf Fresh Market grocery also is on the drawing board for the southeast corner of the project.

Perkins Rowe is being developed about a quarter of a mile from the 1.2-million-sf Mall of Louisiana, the largest mall in the state, located at Interstate 10 and Blue Bonnett Road in the southwest quadrant of Baton Rouge.

"There is very little vacancy in the office market in Baton Rouge, a dynamic largely driven by businesses relocating from the New Orleans area after Hurricane Katrina," says Wylie Prothro, vice president and senior relationship manager in the Atlanta office of KeyBank Real Estate Capital. Prothro coordinated the construction loan.

The residential component will be built atop the retail space on the second through the fourth floors of the 14 buildings. The apartments will include 178 one-bedroom, one-bath units; 111 two-bedroom, two-bath units; six two-bedroom, 2.5-bath units; 20 three-bedroom, 2.5-bath units; and two penthouse units containing four bedrooms and 3.5-baths.

"There is virtually no residential vacancy in Baton Rouge and demand is such that very rapid absorption is anticipated upon completion of construction," Prothro says. "Perkins Rowe is intended to serve the needs of the affluent southeast portion of Baton Rouge and will be a regional draw for the state of Louisiana."

The largest of the 14 buildings in the first phase is a 260,000-sf structure that will be built directly across from Town Square in Baton Rouge. Near this structure will be a 3,200-seat Cinemark theater. Street parking and several parking decks are expected to accommodate about 2,900 vehicles.

Prothro tells GlobeSt.com that the second and final phase of the project is "still on the drawing boards." but will probably be under 400,000 sf. He says it too may have residential, retail and possibly a boutique-styled hotel, but no office space.

Lane L. Hamilton, senior vice president in the Denver office of KeyBank Real Estate Capital, isn't surprised by national developers' interests in starting projects anchored by a robust retail component. "Strong spending by the consumer has been a driving force for the recent economic expansion and is expected to continue into the foreseeable future, which bodes well for newer, well-leased retail shopping centers that have proven their ability to capture their share of those dollars," he tells GlobeSt.com.

"Credit quality for the anchor tenants has generally improved over the last cycle, with a clear delineation of the winners in the basic categories," Hamilton says. "This makes the underwriting of the anchors easier with a clearer picture for future performance."