Regional Malls Not Dying; Rather Rising Like a Phoenix

I’ve been sitting on this story for nearly a month now, but Retail Traffic had an excellent piece in their last issue outlining a trend that most readers of this blog have likely suspected–that malls, especially the big, super-regional centers–have not only proven resilient in the economic downturn but have been performing strongly:

“As the Great Recession unfolded, regional malls—rather than being pushed to the brink—weathered the storm better than any of their supposed replacements. The very things that made fortress malls seem so outdated—their size, their enclosed environments, their dependence on anchors—proved to be powerful assets instead.

Quarter after quarter, U.S. regional mall REITs have outperformed shopping center REITs, beating analyst estimates and occasionally posting NOI growth. By 2010, class-A regional malls shot up to the top of both retailers’ and real estate investors’ list of preferred product types.”

It’s easy to make the case for why this happened. Big box centers relied on too few tenants in number, so when one went belly up, the entire center suffered (and was hard to repurpose). Malls carried a certain sense of place and offered entertainment value (our favorite argument -Ed.), while these other centers didn’t, so they thrived. Most (though not all) of the new “lifestyle centers” failed to achieve a critical mass. Whatever. The point is that we’re seeing a paradigm shift that’s being noted by one of the foremost publications in the industry.

Retail Traffic’s blog did a follow-up after the fact as well. If you don’t follow them, you should–they’re the best source for news in the industry.

*On a related note to the TITLE of this blog post, I made a trip to Phoenix and Tucson, Arizona a few weeks ago, and managed to visit every single mall in those two cities. Look for more content on these in the future.

 

11 Responses to “Regional Malls Not Dying; Rather Rising Like a Phoenix”

  1. Power Square in Mesa too!? Outlet mall that is very hard to know it exists because of poor placement from the street and being only 1/2 mile from Superstition Springs Mall. It’s also mostly dead.

    If you can pull that one off, you’re my hero.

    [Reply]

  2. My argument lately has been that the mall as a concept is not dead: it’s just not being designed or marketed properly. Malls should be more actively luring in the big box anchors, shaking up the tenant mix so it’s not all apparel and re-designing the malls to restore the “fun” elements we mall geeks crave: the elaborate water features, planters and showy architecture.

    I’ve seen quite a few dead malls that have somehow kept the doors opened repurposed and other struggling malls with living anchors that need a shot in the arm in lieu of demolition. These malls with some decent marketing and some ingenuity could be revived into a very fun shopping destination WITH the mall. I’ve looked at mall directories of long demolished malls, and the malls actually were doing okay before the early 1990’s then suddenly died hard. This is usually because the dinosaur anchors pulled out, and nobody could lure in anything else to make it attractive. What if they had hooked a “power center” into the mall instead?

    Obviously in economically depressed cities, the mall will take awhile to come back, but in my view if the structure is maintained and does not decay too badly that perhaps the local economy could be revived and the mall with it in time.

    Here is the realistic future of malls: 1. Less department stores, more big boxes as anchors: plenty of modern strip centers could’ve made excellent community malls, 2. An inline tenant line-up not so skewed towards clothing, 3. Cut down on the kiosks and restore or create raised/sunken areas, planters, trees, fountains, art features, indoor ponds and waterfalls, 4. Shrink the malls: why not 75 stores instead of 200? You could have more malls in town, lower overhead and more variety that way, 5. Consider outdoor malls that are like those in the 60’s, or at least open up the areas between the stores creating an enclosed walkway only in front of the stores so that natural vegetation and less A/C can be used, 6. Aim to impress…don’t make all the malls clones and quit trying to make them look so antiseptic. Bright or dark colors, interesting skylights, strange architectural nuances, varied floorplans and traditional regional architecture should factor into the design.

    [Reply]

  3. The super regionals are the survivors–this has been obvious for a long time. Of course they will outperform a hetergeneous collection of other complexes.

    No one is building new malls and old ones, usually smaller and/or in economically change areas continue to decline and die. These are the places that have gotten stuck because they no longer can carry out the model of national, modestly upscale apparel-oriented retailers as prime tenants. You can’t market your way out of something that is perceived as “less than” this norm.

    [Reply]

  4. Retail Traffic is a publication I check several times per week to keep up with the latest news. I’ve reposted several articles from there to this blog do to there relevancy.

    As Rich has pointed out, the super regional malls will continue to thrive. More to the point right now there are 1100 plus malls in the US & nearly 400 of them just aren’t nessessary do to changing demographics.

    The relationship of the city to it’s suburbs is going through a seed change that includes housing densification, rewrighting zoning codes to stop suburban sprawl, turning malls into mixed use centers & making communities more liveable.

    Take a good look at Tysons Corner a sprawling retailing & office center with some of the worst traffic congestion in the Washington DC area. Several land owners including Macerich as well as Fairfax County & WMATA are working together to turn this car dependent spot into one of the largest transit villages in the country. If successful, it could be a revelution in development patterns.

    [Reply]

  5. Yay Labelscar’s back! I’ve been wanting to add a comment for Carousel Center because Destiny USA is finally getting off the ground: announced tenants, a new opening date. But the comments are broken still on that page.

    [Reply]

  6. Also, in your great Phoenix Malls Adventure, did you visit Christown again?

    [Reply]

  7. Can’t wait to see what you have to say about Metrocenter, curious about your take on Fiesta (dying or not? Who knows?), wonder if El Con would really be considered even a mall anymore (what’s a mall anyway?), and hoping you got to the theater district at Mesa Riverview, because that’s a study in contrasts that could take up a blog in and of itself.

    [Reply]

  8. Fiesta Mall. We had to drive down Southern Avenue to get somewhere. The dead retail across the street from there looked like something worthy of a Flickr photo album, though I couldn’t tell what store was what.

    [Reply]

  9. @Pseudo3D, yep, of course! I didn’t get any pictures, though, and to be honest you wouldn’t want to see them even if I had. The place looks like a dingy old subway terminal nowadays, not like the glorious mall it once was.

    [Reply]

  10. @Pseudo3D, I was able to fix this, finally, and thanks again for alerting us to it. I have no idea why this happened–it was some glitch that occurred when we weren’t even making any technical changes–and the only way to undo it was changing the URL of the page, for some reason. Either way, it works now.

    [Reply]

  11. The Gulf Coast Galleria, a new indoor mall is planned for D’Iberville, Mississippi. This town is just north of downtown Biloxi MS, and all the Casinos there. It is to be built by CBL Properties next to their power center, The Promenade, also in D’Iberille, at the intersection of I-10 and I-110 spur that ends it downtown Biloxi. Does anybody believe this is really going to happen? I bet it gets downgraded and to another open air lifestyle center. The Gulfport/Biloxi metro area has so many shopping centers already: the 40+ year old Edgewater Mall in Biloxi, and the 85 store Gulfport Premium Outlets, the Crossroads Power Center in Gulfport, and of course the Promenade. This will empty out what’s left at Edgewater Mall, and cause a mass exodus from Gulfport Premium Outlets. What do y’all think?

    http://www.sunherald.com/2013/07/23/4817581/construction-on-galleria-mall.html

    http://www.cblproperties.com/pag.nsf/AvailParcelsforWebCorp/B3C72BAF71C687DA85257B6D00063C24?opendocument

    http://www.cblproperties.com/cbl.nsf/2013-05-06_CBL_GulfCoastGalleria.pdf

    [Reply]

Leave a Reply


+ four = 13