Arthur Coppola, Macerich's president and CEO, revealed the plans yesterday at a Lehman Brothers conference in New York City. "We are currently working on an entitlement that we believe we will have at the end of this year," he said. Tysons, one of the country's largest malls, is 97% occupied and anchored by Bloomingdale's, Hecht's, L.L. Bean, Lord & Taylor and Nordstrom.
The Lehman Brothers panel Coppola spoke at was on different aspects of developing and redeveloping properties. He also touched on his company's plans for Phoenix, where Santa Monica, CA-based Macerich plans to build five major retail projects by 2016. The developer, which owns 64 malls across the country, is currently constructing SanTan Village, a 1.2 million-sf power center, in Gilbert, AZ.
Overall, Macerich executives will spend $200 million to $400 million annually on new developments and redevelopments. Speaking about the $11 billion proposed merger between Federated Department Stores and May Department Stores, Coppola said that the company has 15 centers where the retailers have overlapping stores and he expects they will close some of those spaces, leading to future redevelopment opportunities.
Macerich wasn't the only company represented on the panel with big development plans. Scott Wolstein, chairman and CEO of Developers Diversified Realty, said that his Cleveland-based company, the owner of 470 centers, is currently working on an $800 million development pipeline. The centers range from 600,000 sf to 1.2 million sf and are costing $100 to $150 per sf to build.
Peter Lowy, managing director of the Sydney, Australia-based Westfield Group, stressed that all retail owners need to focus on redeveloping their assets. "We redevelop our assets and we buy properties to redevelop them," he said. "You need to spend the capital so you can take care of the consumer's demands." Westfield, which owns 126 centers internationally, as well as 66 US malls, is currently spending $300 million on the renovation of its Westfield Shoppingtown Topanga in Canoga Park, CA.
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