Tenants have been so eager to move into the Northgate Centre Marketplace in Medford that developer Steve Morgan anticipates a second phase will begin even as the first round of tenants are moving in during late August or early September.

Tenants have been so eager to move into the Northgate Centre Marketplace in Medford that developer Steve Morgan anticipates a second phase will begin even as the first round of tenants are moving in during late August or early September.

With the addition of Men's Wearhouse and La Strada Boutique moving from McAndrews Marketplace, he said, all but 5,000 square feet of the 87,000-square-foot first phase now are leased. Five Guys, a rapidly growing hamburger chain based in northern Virginia, will occupy a separate building near the development's main entrance.

"We've been pleasantly surprised with the interest we are getting," Morgan said. "It shows we have what the valley has been needing and that the economy is turning a bit."

The surprising demand has sped up work on the 200,000-square-foot second phase, Morgan said. "We are beginning design work for the second phase because of the interest of some other major tenants right now."

Formal announcement of the long-anticipated retail component of the Alba Village project came last month, clearing the way for the likes of Trader Joe's, REI and PETCO to arrive in the Rogue Valley.

National shopping center operator Regency Centers has begun site work leading to the construction of buildings that will house the initial tenants of the 84-acre site between the "Big X" — where North Pacific Highway and Highway 238 cross — and East McAndrews Road.

The city has issued permits for shell construction — before tenant improvements — for a $3.14 million, 54,560-square-foot building housing REI, PETCO and Trader Joes; a $923,000, 19,051-square-foot building housing cosmetics seller Ulta; and a $470,000, 7,142-square foot building housing Men's Wearhouse.

Trader Joe's will operate a 13,000-square-foot store, while outdoor gear and apparel retailer REI will occupy 23,500 square feet and PETCO will go into a 12,500-square-foot space. "We're pretty much leased out of the first phase," Morgan said.

The development will include two restaurants near the main entrance off Highway 238. Five Guys will take one of those slots and negotiations continue for the second restaurant, Morgan said. Although other retailers from Medford and Ashland are interested in moving to Northgate Centre Marketplace, Morgan said the goal has been to attract newcomers to the area. "We are trying not to cannibalize other local centers," he said.

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.