Vegas malls, power centers at saturation level in areas

Phil Levine

Monday, May 22, 2000 | 11:25 a.m.

The neon-drenched retail of the Las Vegas Strip is renowned around the world.

But Las Vegas is, of course, more than the boulevard that bears its name, and it's the shopping habits of the city's 1.3 million inhabitants that's making this another banner year for regional and neighborhood shopping malls.

"The (regional) malls are, for the most part, having another strong year," said Matt Bear, retail specialist with broker Colliers International. "With the continuing growth in the region, big box retailers are also especially anxious to get into this market."

Kit Graski, retail broker with CB Richard Ellis' Las Vegas office, said his company foresees another remarkable year for Las Vegas' retailers.

"We expect to see about 3 million new square feet of off-Strip retail space come on line this year," said Graski. "That's just slightly more than was brought on stream last year. That's also far more (new retail) than just about any city our size, anywhere."

As the city continues to evolve, so too do the area's shopping centers.

Illustrative of the changing market: residents of Summerlin will soon have a regional mall closer to home.

The Rouse Company, parent of the Howard Hughes Corp. and owner of the Strip's Fashion Show Mall, plans to build a 1.1 million-square-foot regional shopping center in Summerlin.

Located between Charleston Boulevard and Sahara Avenue east of the Beltway, project construction will likely begin in 2002, with completion in 2003 or 2004.

"It will likely be a lifestyle (retail) center, featuring an outside market to promote that outdoor feeling among shoppers," said Bear.

"Rouse has done these types of projects before, and this should prove to be a very successful center. When you look at the growth of Summerlin, it's obvious the demand for this type of retail mall is certainly there."

Bear said Rouse's Summerlin project could prove to be a formidable challenger for General Growth Properties, owner of the Meadows and Boulevard malls.

"The Summerlin mall could devastate Meadows," he said. "People living in the western section of the city, who now go east to shop at Meadows, may instead shop in Summerlin.

"I think Meadows may have to look at bringing in some new tenants to attract more customers."

Graski agrees.

"I think Meadows could be dramatically affected by the new Summerlin mall," he said. "Regional malls try to stay a certain distance away from each other, and that's why Rouse chose not to locate at the intersection of Rampart and Charleston.

"But the Beltway is driving just about everything in retail these days. That's why they chose to build (the Summerlin mall) where they did, because nothing major really happens in retail today without the Beltway."

Meadows Mall General Manager Frank Wheat said the mall's owners are aware of the potential affect the Summerlin project might have on the property, and plan to take "proactive action."

"We're certainly aware of the changes in the market, and we're looking at proactive redevelopment to meet those changes," he said. "We have some deals in the works that we hope we will be able to announce shortly.

"The local population is increasing, but we can't rest on our laurels."

Wheat said his mall is having another strong year, with first quarter sales up about 8 percent over last year; Meadows currently has just under 1 million square feet of leasable space.

Sue Brandt, marketing director of the Boulevard Mall, said the shopping center is also repositioning itself to meet the changing demographics of the Las Vegas market.

"Since we were purchased two years ago by General Growth, we have been re-merchandising with several new stores and different products," she said.

Recent arrivals at the mall include a cross-section of retailers, ranging from Motherhood Maternity to youth-oriented apparel stores such as American Eagle Outfitters and Forever 21.

Perhaps most illustrative of the mall's push to attract younger shoppers is Santa Barbara, Calif.-based retailer SKINMARKET Inc. Primarily targeting teenage girls, the cosmetics and accessories store bills itself as a "beauty hangout" and its motto is "happy loitering."

The Boulevard Mall encompasses about 1.2 million square feet, making it the state's largest indoor mall. Brandt said the mall continues to perform well this year, with sales up 4 percent as of March and year-to-date foot traffic up 13.5 percent over the same period last year.

In Henderson, the Galleria Mall at Sunset stands at the epicenter of an explosion of new retail; so much so that industry observers express concern the area may soon reach a saturation point.

"There's more retail within 3 miles of the Galleria than just about anywhere in the country," said Bear. "Retail (in the area) is growing faster than the population can support, but retailers are looking at the area's growth and wanting to get in quickly.

"A good example of how much retail there is can be found in the home improvement market. You have Home Depot, Lowe's and HomeBase all near each other."

Graski said about 1 million square feet of retail is in the planning stages for the region surrounding the Galleria Mall.

"Of that amount, it wouldn't surprise me if between 300,000 and 400,000 square feet doesn't get built," he said. "Are we near saturation there? I think we may be very soon."

Still, a representative of Galleria Mall owner Forest City Enterprises Inc. of Cleveland says the mall's recent success necessitates further expansion.

"We plan a 95,000-square-foot expansion, although the actual dates for the work have not been finalized," said spokeswoman Leslie Resnick.

However, retail growth isn't limited to the Southeast corridor.

In addition to Rouse's planned mall in Summerlin, a new retail power center is slated to open this fall in northwest Las Vegas.

The 100-acre Centennial Center shopping center, on the west side of U.S. 95 between Ann Road and Centennial Parkway, will offer 900,000 square feet of retail space. Phase One of the project will include anchor tenants Wal-Mart Supercenter, Sam's Club and Home Depot.

The center is being developed by Las Vegas-based Territory Inc., along with partners The Olympia Group and the Developers Of Nevada.

Despite the proliferation of large scale -- or "big box" -- retailers, industry observers say nationwide retail interest in Las Vegas shows no signs of abating.

"Most of the big box retailers that want to be in this market are already here," said Jeremy Aguero, analyst with real estate firm Lee & Associates.

"But there are still several national retailers looking to get into the Las Vegas market, such as Fry's Electronics and Bed Bath & Beyond.

"We expect this year to equal, and maybe slightly surpass, the level of new retail space added last year. That's incredible, when you consider that there's probably another 3 million more square feet coming up behind this year as well."

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