Anchors generate mall traffic that indirectly increases the sales of lesser-known mall stores.
Mall developers internalize these externalities by offering rent subsidies to anchors and by charging rent premiums to other mall tenants. We estimate that anchors receive a per foot rent subsidy of no less than 72 percent that which nonanchor stores pay. In contrast, the sales and rent per square foot of other mall stores are higher in superregional malls than in regional malls.