Not Just an Odd Couple, An Odd Threesome

Implications: For almost the entire history of JCP's store expansion, they have been recognized in the industry as having one of the most conservative and highly selective programs of any major chain.  Suddenly they are starting to take locations in secondary, troubled strip centers and paying premium prices for the privilege. What is happening? For almost the entire history of Wal-Mart's relocation and superstore expansion program they have been noted for their willingness to dispose of their old properties at near giveaway prices. Suddenly they are hanging on to vacant old stores for two or three years in an attempt to obtain higher prices. What is happening?

Analysis: What I believe is happening is a unique juxtaposition of disparate interests.

This article is further evidence of the rumored increased emphasis JCP is putting on their effort to "hedge their bets" on their mall department store locations. Due to management pressures to meet their goals of a certain number of strip center locations for the year, they are forced to take mediocre locations in distressed centers and pay premium prices to do so on a "fast track" basis.

The article also provides further confirmation of Wal-Mart's new program of not disposing of unwanted real estate until they receive an offer closer to their own appraised value. Part of the reason for this newfound desire to discontinue their "firesale" of unwanted properties, is their success in reducing their inventory of vacant old stores so that now they are more able to handle their disposition program in a more orderly fashion. 

Finally, by mentioning the fact that this is a Simon REIT-owned strip center, and outlining the several other anchor tenants that have left this center for better locations, it confirms my belief that no one is immune from the ravages of time and competition by newer and better located shopping centers.