WSJ Sensationalizes Routine Mall Conflicts

Implications: WSJ writes a feature article about an event that has zero significance out side of the Phoenix mall development community. While it may be of interest to those curious few who care about routine struggles between real estate developers of every type, size and description, it is really of no consequence to the larger business community. It must have been a slow news day at the business desk. All that really happened was that one very wealthy and influential mixed use developer managed to outmaneuver another wealthy and influential mixed use developer for the rights to build a regional shopping center complex on the far north side of Phoenix. Actually, by WSJ's own admission, it wasn't even new news. The real news had happened several months ago when one developer gained a commitment from Nordstrom's which virtually guaranteed that Bloomingdales would follow suit. The article was all about Bloomingdale's new commitment which was actually a nonevent.

Analysis: The most important single fact about regional mall development has always been, is now and will always be, the question of "who can sign up the dominant anchor store first"?
Once that is determined the rest of the development process becomes a routine process of putting the rest of the pieces together. The only real risk of competition a developer faces after signing the dominant anchor, is the possibility that some of the less desirable anchor stores that were not able to get into the first development could ban together and create a second development. 

In past years when there was an excess of department stores jockeying for position in the major metros, it happened with some frequency. That is where the "B & C' malls come from! However there simply are no longer an excess of department stores so that whomever signs the dominant player automatically gets the second  & third ranked stores.

The only thing that was different about this situation in Phoenix was the fact that the dominant local developer who has built 11 of the 12 malls, was finessed by a New York developer who has never built a single thing in Phoenix. I am quite sure that Macerich, who recently bought the local mall developer, is feeling pretty silly right now to let a stranger pull this kind of trick right in their own backyard.