Interra Sizing Up More Retail Development Sites

PHOENIX-A Chicago-based developer, with Prudential Real Estate Investors as its equity backer, has two sites in hand and five more in its sights to develop retail in the Greater Phoenix metro. The one-off developments will range from 15,000 sf to 400,000 sf.

Tom Gamsjaeger, president of Interra Development Partners LLC and co-owner of Interra-Vision Development LLC, tells GlobeSt.com that the 6.7-acre site in Surprise and 10.25-acre tract in Peoria should break ground within 15 months. He says the goal is to have the as-yet unnamed projects 50% preleased before construction gets under way. Both projects will be part of the first development wave for a $250-million retail pipeline for Florida, California and Arizona. The goal is to commit the funds within three years, he explains.

The development dirt in Surprise was marketed, but the Peoria site was bought off market, according to Gamsjaeger. In Surprise, the JV got the southeast corner at the junction of Cactus Road and Sarvial Avenue, right across the road from Westcor’s mixed-use Prasada and Vestar Development Co.’s 800,000-sf power center. The Peoria site is the northwest corner of Happy Valley and Vistancia roads, within a half-mile of a master-planned community.

In Surprise, the JV will build a $12-million shopping center with 78,000 sf. Peoria is getting a $25-million project with 29,000 sf. Both unanchored projects are being designed by Kurt D. Reed Associates Inc. of Phoenix.

“We are negotiating with several prospects, including banks and restaurants,” Gamsjaeger says. The firm is soloing on the Surprise development while CBRE is on board to help with Peoria’s preleasing.

The JV projects may or may not end up as merchant builds. “We will take a look at the current investment climate at the time the projects are stabilized and make a decision at that point,” Gamsjaeger says. The JV’s goal is to develop up to five retail centers per year in the metro, targeting nationals for the tenant base.

Gamsjaeger’s firm has roughly 200,000 sf completed or under development in the region, but it’s not part of the JV program. “Phoenix is an important market for our company,” he stresses. “The housing market is slowing down, but we feel there are strategic opportunities for retail in the Phoenix metro trade area.”