85% Preleasing Kicks Off $30M Posh MXD Project

By Connie Gore

DALLAS-With preleasing at 85% for a mixed-use plan, PRG Realty and Providence Realty Partners have jump-started site work on a 2.1-acre tract in Preston Hollow. The $30-million Hillcrest Crossing, set to rise on a prized corner surrounded by posh neighborhoods, has landed Capital One Bank for a pad site and has a national health and beauty spa chain, salon and other high-end services and restaurants in the reserved lane.

Hillcrest Crossing will consist of an 80,000-sf three-story building, with 30,000 sf of retail on the first floor, an 8,000-sf freestanding bank and two levels of underground parking. The development will sit at the corner of Hillcrest Road and Northwest Highway , which PRG and Providence bought off market in August 2006. The project, which has stirred interest from its neighbors, will deliver in fourth quarter 2008.

Originally envisioned as a retail and office mix, Hillcrest Crossing is ending up heavily weighted by retail, much of which has been chased because of residents' input and won because of the location. "It's been an amazing project to work on," says Jack Gosnell, executive vice president of Dallas-based United Commercial Realty. He says he's been fielding "four and five calls" per day on the project. Residents openly have expressed opinions about what they'd like to see in the line-up and prospective tenants have been eager to rush in before site prepping could begin, he tells GlobeSt.com.

Gosnell credits the interest to the fact that it's a "mature site that's been underutilized for so long." The spa chain's identity is being kept under wraps until it's a done deal, which is days away from a final signing. But, it's taking 35,000 sf on the second and third floors as its Dallas inroad and is getting naming rights too. A salon operator is in line for 14,600 sf on the second floor while talks are in the final stretch for both end caps--one for a national restaurateur and the other, a local dining establishment. Also in the final stretch are first-floor deals for St. Charles Optical, based in New Orleans , Luxury Day Spa and Lakeside Cleaners.

According to the marketing flyer, the retail space is commanding $42.50 per sf to $55 per sf. Pad sites were projected at $10 per sf, triple net.

Hillcrest Crossing's changed mix, which is now down to just 14,000 sf of office space on the third floor, forced the developer to massage the parking requirement. The revision passed muster with the city's board of adjustments in the past two months. Dallas-based O'Brien & Associates Inc. designed Hillcrest Crossing and EE Reed Construction Co., also local, is building it.

Jerry Bolz and T.D. Briggs with Peloton Real Estate Partners in Dallas hold the office leasing assignment. Bolz says the marketing is focused on medical office, financial services and oil and gas companies. "It's going to be someone that we'll pull from Park Cities who wants to be close to home," he says, adding a specialty medical practitioner also is a strong likelihood. The office space is quoted at $32.50 per sf plus electric.

The developer has taken particular care with the build-out. It's the last commercial corner at the southern end of an uninterrupted 12-mile stretch of high-end, single-family homes. In a one-mile radius, the average annual household income is $178,689. "This will be extremely convenient for the residents," says Gosnell, who's teamed with UCR's executive vice president and partner Lawrence Attaway to craft the retail story.