Paradise Valley Mall works to boost occupancy rate

The Valley's newest Costco opened at Paradise Valley Mall last summer. Westcor, which owns the northeast Phoenix mall, hoped the addition of the popular retailer along with the reopening of a movie theater this summer would be the catalyst to increasing the mall's occupancy rate.

A year later, the vacancy rate at Paradise Valley Mall has not changed, with 20 vacant stores.

Mall officials say the economy is to blame, but some critics say that the indoor mall - and others like it - may have already had their best days.

The national vacancy rate for shopping malls is 10.9 percent, while the shopping-mall vacancy rate in Phoenix is 11.4 percent, according to REIS, a New York City company that tracks commercial real estate. The vacancy rate at Paradise Valley Mall is 15 percent.

National and Valley shopping malls had vacancy rates below 9 percent last summer.

Paradise Valley Mall, at the northwestern corner of Tatum Boulevard and Cactus Road, has 20 vacant stores not including kiosks, the same number as last summer. Despite opening several stores over the last year, mall officials said it's the highest number of vacancies in years.

Getting new occupants isn't as simple as some may think, said Thomas Randall, senior property manager at PV Mall.

"Not only are we continuing to rebuild, we're still in the current economic state that the entire nation is in. All those factor into the progress we're making and the speed in which we're trying to accomplish that," Randall said.

Retailers that normally would have opened stores in northeast Phoenix aren't expanding as quickly, he said. And mall officials said attracting a new company may take a while because they are selective about which stores they bring to the mall.

"It's not a matter of attracting the latest and greatest" trends, Randall said. "We (Westcor) all are involved in attracting the right retailer for each one of our centers."

PV Mall may not be experiencing as much success as some Northeast Valley competitors because it is an enclosed shopping center, said Mark Stapp, executive director of the Master's of Real Estate Development program at Arizona State University's W.P. Carey School of Business. Retail experts say shoppers now favor outdoor shopping centers over traditional enclosed malls.

"You've got Kierland Commons, Scottsdale Quarter and Desert Ridge Marketplace within the primary market area for PV Mall, so it is competing in an environment that 15 years ago it wasn't competing in and 10 years ago it was barely competing in," Stapp said.

Still, Randall said, he is not discouraged.

"Our business is very cyclical. There's always going to be a newest and latest and greatest thing. PV Mall has been here for 30 years and will continue to service our immediate trade areas with the best possible," he said.

The Northeast Valley's only other enclosed shopping center has fared much better.

Scottsdale Fashion Square is the Valley's largest mall and is also owned by Westcor. The mall has a 6.9 percent vacancy rate, according to a report from CB Richard Ellis.

Randall said Paradise Valley Mall officials are working on attracting a few things they hope to announce within the next month. He said he remains optimistic about PV's future because it is a mall that responds to its loyal customer base.

"Our trade areas asked for a movie theater and we worked to build that," he said. "If you get discouraged (with hard times), then you'll have a pretty dismal outlook."

by Eugene Scott The Arizona Republic Jul. 31, 2010 07:09 AM


Paradise Valley Mall works to boost occupancy rate