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PHOENIX-Vestar Development Corp.’s announcement that its 1.3-million-sf Tempe Marketplace has hit 95% occupancy, with one year to go before it opens, is news. But to those who follow the retail trends, the quick lease-up isn’t surprising.

Tempe Marketplace, Vestar’s 1.2-million-sf Desert Ridge and Macerich’s one-million-sf Biltmore Fashion Park renovation are prime examples of the industry’s ability to move from traditional power centers and enclosed malls to heavily landscaped, open-air venues with lifestyle components such as dining and entertainment. “We call it a power center on steroids,” says Tom Wood, senior vice president of marketing for Colliers International Inc. in Phoenix.

Regardless of the product label, experts say large lifestyle developments are becoming increasingly popular with consumers, which means they’re also in high demand by retail tenants. But it hasn’t always been that way. David Larcher, executive vice president of Phoenix-based Vestar, recalls when Desert Ridge was introduced to the area just a few years ago. Retailers, he says, were skeptical because it was considered out-of-the box thinking. “One, we were going outside the enclosed mall structure, in the middle of the desert,” he tells GlobeSt.com, “and two, we were demonstrating specialty stores surrounding the traditional big-box stores.”

But these days, Larcher and local brokers are finding retailers more accepting of the outdoor center concept. “First, charges are more reasonable. They’re not paying extra for maintenance of common areas and air conditioning,” says Bob Pearlstein, a first vice president in Phoenix for CB Richard Ellis. “Second, the open-air centers are user-friendly. People can pull up and park in front of the stores rather than having to park in another section and walk to their destination.”

The promotional factor becomes easier for retailers too. “When a consumer goes into an open-air center, they can drive around, see the signs, see the stores,” Pearlstein explains. “But when it comes to enclosed malls, there is no outside visibility signage. People need to actually to into the mall and find a directory to know where they’re going.”

Pearlstein points out retailers too like open-air centers because they get more market depth and penetration–eight to 10 miles between stores rather than the 15 to 20 miles between malls. He cites Kohl’s as a good example: it opened 11 stores in the metro Oct. 1, 2003. “If they’d gone into the area malls, they would have only been able to open six locations,” he says.

Wood cautions that Tempe Marketplace’s quick lease-up doesn’t necessarily mean that it will be easy going for all outdoor lifestyle centers. “I think the jury’s out because it’s still a fairly new concept,” he stresses. “We haven’t had these new lifestyle centers built in Phoenix so it’ll be interesting to see how foot traffic behaves in the middle of summer with the 100-degree-plus heat. But I’m excited to see how this open air stuff will work.”

But, Larcher says developers like Macerich and Vestar are continuing to look to the outdoors. “From a development standpoint, we’re able to put a higher level of amenities in designing outdoor centers than what we’ve seen in an enclosed mall,” he explains. “Retailers like that, because it increases the traffic.”

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