Big-box and smaller retail centers continue to gain speed along one of Houston's major thoroughfares. Tenants are filling up existing developments faster than most project leaders expected, and new centers are coming to life near new and upcoming office space and flourishing neighborhoods.

"I bought land in December, and it looks like it is all going to be sold in one year," said Vincent Giammalva, owner of Giammalva Properties and developer of a retail project off I-10 near Westgreen Boulevard. "It has been a lot faster than expected. I thought it would be a two- to three-year process."

The 122,000–200,000 individuals who drive on I-10 in the Katy area, according to the Texas Department of Transportation, make freeway-facing properties hot commodities, Evergreen Commercial President Lilly Golden said it is a major point in why Katy Ranch Crossing sold nearly 80 percent of its Phase 1 in a few months.

Big-box activity

Katy Ranch Crossing—on the south side of I-10 near the Grand Parkway—has quickly developed and will see its Phase 2 materialize in the coming months as Phase 1 has just one slot left for a big-box store and a handful of smaller storefronts available.

Dental Art, Freddy's Frozen Custard and Steakburgers, Dollar Tree, Katy Emergency Center, Cody Pools and Subway are among businesses already open in Phase 1.

Mike Baker, owner of the center's developer Freeway Properties, said he is seeking tenants for Phase 2, which will include about 40 acres of retail and potentially banks. Depending on how sales mobilize, a Phase 3 could be planned from the 40 acres.

"We need big-box tenants like a TJ Maxx or Home Depot to put a lot of shoppers in the center," Baker said.

However, close proximity to Katy Mills mall makes marketing to clothing stores a challenge, said Golden, who works with Baker in marketing the center's retail space. It is why Phase 1's tenants are primarily food services and entertainment venues, she said.

The company uses software that gives suggestions on types of tenants based on examining areas similar to Katy Ranch Crossing, Golden said. It helps developers know what consumers are looking for.

"We are looking for the best tenant mix for the area—it doesn't always work out, but we try," she said. "We look at a lot of things, like restaurant and retail void analysis. We have been very successful in finding tenants that have been extremely successful in the market. Those in Phase 1 have been very satisfied with their sales projections."

Meanwhile, Phase 1 in Katy Main Street—at Pin Oak Road and I-10—filled up earlier this year, nearly five years since its groundbreaking. Its Phase 2 has no official tenants as of mid-June, but David Ferguson with BPI Realty Services said he hopes to secure a big-box this summer.

"We are aggressively looking to start our second phase and are searching for prospects," he said. "We hope to begin the next phase very soon. We envision having, or would like to have, soft-good users, like clothing stores. When you can get women and mothers into your shopping center, usually that drives the traffic for other stores because they tend to cross-shop."

H-E-B's store in Katy Main Street's Phase 1 was the catalyst to its completion, Ferguson said, and he hopes to find a similar powerhouse for the 12 acres of retail in Phase 2, such as a clothing or major fitness center.

"The main thing we consider is who has a major void in the market—who does not have coverage," he said. "We are also talking to businesses about relocating or opening a second store."

Strip-center projects

Giammalva's 46-acre site between Westgreen Boulevard and Fry Road could fill up in December, one year after he purchased the parcel, he said, with only two vacant lots available.

Among upcoming tenants are Shogun Grill and Sushi Bar, BJ's Brewhouse, Uncle Julio's Fine Mexican Cuisine and Newk's Express Caf. BJ's should start construction by the end of the year, and Shogun and Newk's are looking at an early 2014 start, he said. Giammalva said his success in finding tenants comes from the success of the Katy area.

"Kids who grew up in Katy [years ago] and went to Katy High School probably did not relocate back to Katy because it was a farming community," he said. "Now, it is an official go-to community. Once kids graduate college they come back to the community because there are jobs and affordable housing and also more upscale homes."

Responding to the demand for office space and the subsequent retail need, Randy Wile of Wile Interests is making strides with The Offices at Greenhouse at the southeast and west corners of the intersection at Greenhouse Road and I-10. Phase 1 features about 14,700 square feet of both office and retail space combined on the southeast corner of the intersection.

"Most projects in Houston are random pieces of land," Wile said. "We see projects with integrated spaces are places people want to hang out at—places like City Centre."

To accompany the Starbucks, which opened June 18, Potbelly's Sandwich Shop and Smashburger, which will open later this year. Wile said consumers can expect more restaurants and personal-service businesses in Phase 2 at the intersection's southwest corner to start construction in the next six months.

"There are tons of homes being built, the population is increasing immensely and stores need second locations," Ferguson said.