Changes are afoot for traditional suburban malls that are anchored by big-box chains and department stores.
With years of declining interest in the enclosed mall, real estate developers and mall operators are following the trend of lifestyle centers and are essentially turning themselves inside out in order to keep up with changing consumer preferences.
Most notably, the proliferation of online shopping is fundamentally changing the way consumers shop and therefore the way the shopping mall industry will operate.
As a result, mall owners and operators are redesigning malls with more street facing storefronts and outdoor spaces for dining and entertainment, as well as recruiting high-end luxury tenants.
In fact, more than 40% of the roughly 1,400 malls in the U.S. will most likely not survive with their current formats and will either be completely reconfigured or demolished.
By adding restaurants and services as well as creating experiences that cannot be mimicked online, malls will ultimately be turned into places where people go to shop, eat and be entertained – which is a main reason people shop at malls over ordering online according to the International Council of Shopping Centers.
Redeveloping and Repositioning
While redeveloping malls is not a one size fits all approach, it has the potential to make suburban space more livable and more economically productive.
The Voorhees Town Center in Voorhees, N.J., for example, demolished half of the underperforming Echelon Mall and in its place, built luxury apartments, created a tree-lined and a pedestrian-friendly boulevard – all anchored by a Macy’s and a Boscov’s.
The township’s government also built out the remaining portion of the mall into their offices. Furthermore, there are a growing number of restaurants, coffee and yogurt shops, as well as other amenities that bring in hundreds of visitors each day.
Is It Time To Consider A New Development Strategy?
When considering new mall-based real estate or development strategies, it’s essential to assess and measure existing mall performance, and identify the wants and needs of the consumers in the mall's trade area.
If you’re interested in redeveloping your mall-based real estate strategy, contact us.