COMPANY PORTFOLIO SERVICES CONTACT TENANTS COVID-19 3 new outdoor shopping malls are coming to metro Phoenix 10.04.2021 / Development Source: AZ Central Arizona has added nearly 1 million people over the past decade or so, yet hardly any sizable shopping centers were built over that span. But that’s about to change in a notable way next year when mall operator Vestar breaks ground on three new open-air shopping centers — two in Queen Creek and one in Peoria, all on undeveloped land. The projects are slated to open late next year or in early 2023. Helped by strong economic tailwinds and little new retail construction of late, the Phoenix-based company is seeing “unprecedented demand” for rentable space at its 18 existing outdoor malls in Arizona, said David Larcher, Vestar’s president and chief operating officer. These are the new shopping centers that are coming: The largest of the three new projects, Queen Creek Crossing at Ellsworth and Queen Creek Roads, will have roughly 300,000 square feet of leasable space. That center is projected to open late next year. The second Queen Creek development, Vineyard Towne Center with 270,000 square feet of leasable space, is scheduled to open late next year near the intersection of Gantzel Combs roads. The Peoria development, the Shops at Lake Pleasant, also is scheduled to open in late 2022. With 90,000 square feet of leasable space, It will be located near the intersection of Happy Valley Road and Lake Pleasant Parkway. The debut of three new shopping centers, after a stretch when only a few were built statewide since the Great Recession, attests to the vibrancy of bricks and mortar retailing. It continues to play an important role, despite the advent of e-commerce and the unfounded assertions that physical stores and malls are disappearing. New shopping preferences Some of the demand increase reflects what Larcher calls “revenge shopping,” or a return to store visits by customers after the lengthy restrictions posed by the COVID-19 pandemic. In addition, spurred partly by the pandemic, many retailers are using their physical stores as merchandise pick-up and return points for online sales. For metro Phoenix specifically, population increases, a hot housing market and a strong local economy are among the other factors spurring mall expansion, along with a general lack of new-store construction, Larcher said. Sales logged by Vestar’s current shopping-center tenants in Arizona are up 11% from the comparable period in 2019, and foot traffic is up about the same, Larcher said. Those totals could increase as many movie theaters, still currently operating at reduced capacity, return to a more normal setting, he added. Vestar operates 18 open-air shopping centers around the state, with the largest being Tempe Marketplace, Desert Ridge Marketplace and Crossroads Town Center in Gilbert, each with a bit more than 1 million square feet of leasable space. The company is the largest privately-held developer and owner of outdoor shopping centers in the western U.S., with operations in Arizona, California, Texas and four other states. About 97.5% of Vestar’s leasable space is occupied. Rents have risen too, along with costs for building materials. Retailing in a time of transition Retailing at shopping centers has changed amid the challenges posed by online competitors such as Amazon and by the COVID-19 pandemic. For example, Macerich, owner of most of the state’s largest enclosed malls including Scottsdale Fashion Square and Biltmore Fashion Park, has reported more mixed uses ranging from hotels and office space to electric-vehicle showrooms. Mixed uses aren’t as prominent at Vestar’s centers, though some new types of tenants have emerged. More local restaurants, as opposed to chain ones, are a recent trend. In fact, restaurants and bars are taking a large share of space, especially as the shopping centers focus on providing more late-hour entertainment events such as concerts. Vestar employs 18 people companywide who market and plan events ranging from free outdoor concerts to local dance-club contests and art exhibits. Tempe Marketplace hosts around 300 such events annually, all free and open to the public. “We’re trying to create an environment where people want to spend their time,” said Jeffrey Axtell, executive vice president at Vestar. “When the stores close at 9 or 10, people head to the theaters or restaurants and stay until midnight.” In some communities, including newer ones without much of a traditional or historic downtown, shopping centers have become the new town square. “We’re bringing people here to shop, dine and play,” Larcher said. MEDIA For media inquiries, please contact Rachel Forman. © 2021 Vestar Contact Us