In Las Vegas, a local company that is not a Preferred Developer, Laurich Properties, Inc., has developed and is developing 18 drugstores for four different national chains. Laurich Properties is working with Walgreen's, Sav-on, Longs and Rite Aid, and the 18 drugstores the company has developed is as many, if not more than any preferred developer of these drugstore chains. "It is not easy being an independent drugstore developer," says Hank Gordon, president of Laurich Properties. "The obvious advantage of being a Preferred Developer is that you are typically 'spoon fed' locations."

That is because a Preferred Developer has an ongoing relationship with a national chain and it has direct access to a chain's in-house real estate representative or real estate manager. A Preferred Developer is told by the chain what particular geographic areas in which to locate new sites for the company.

"But there are also disadvantages to being a Preferred Developer," adds Gordon. "For example, if my company was to be appointed the Preferred Developer for Rite Aid, we would not be able to develop for any of the other drugstore chains here in Las Vegas, such as Longs Drugs, Sav-on or Walgreens."

Other disadvantages of being a Preferred Developer are that you are fixed at a certain return on investment and you eventually run out of product to develop when the chain has all of the locations it has planned for an area fulfilled.

From a national chain's point of view, it is very beneficial to work with a Preferred Developer. By letting one developer coordinate the building of all the stores in a particular area, chains can negotiate lower development costs due to the shear volume of the projects. Using a Preferred Developer also gives chain retailers the convenience and familiarity that comes with "one stop shopping."

So why would a national chain want to work with a non-preferred developer? As always in real estate, the answer is "location, location, location," and control of a location. The key to a retailer's location has always been spacing-how to provide the best possible store locations with enough distance between them so that they do not "cannibalize" each other's trade area.

It is a simple concept in theory, but in practice it can be difficult since most Preferred Developers and real estate representatives of national chains are not based in the market the chain is wishing to expand into. Therefore, it can be hard to know what is an "A" location and what is a "B" location from hundreds and sometimes thousands of miles away. Which is why in Las Vegas, retailers like Sav-on Drugs count on a non-preferred developer like Laurich Properties to help select new sites, secure governmental approvals, and develop quality stores.

"Laurich Properties has been invaluable to us in selecting new locations in the Las Vegas Valley," says Chris Huss, vice president of American Stores Properties, Inc., the parent company of Lucky and Sav-on. "The area is growing so fast, it's almost impossible to project new locations for stores without the expertise of a local developer, even if it is a non-preferred developer." As the largest Las Vegas-based retail developer, Laurich Properties has an intimate knowledge and insight into the wildly expanding but competitive Las Vegas market. In addition, a sophisticated developer like Laurich Properties understands the spacing needs of different retailers and can match retailers to successful locations while helping them avoid potential pitfalls.

Concludes Gordon, "I've always believed that if you know what you are doing, just because a national retailer has a Preferred Developer assigned to your city does not mean that you cannot make a deal with that retailer."

Laurich Properties, Inc. is the largest Las Vegas-based retail developer with more than 3-million square feet of retail space in southern Nevada. Since 1990, the company has been responsible for more than two-dozen neighborhood and power shopping centers in the Las Vegas area. Presently, Laurich Properties has more than 26 retail projects in the planning and/or development stages in the Las Vegas Valley.