When the first shopping mall opened in Edina, Minnesota in 1956, no one knew how this once unique scene would shape the future of consumer shopping habits. Fast forward to over 60 years later, and shopping malls are now everywhere; the Baltimore-Washington region alone has over two dozen malls to choose from.
Unfortunately, though, shopping malls hit their stride about two decades ago; with the convenience of online shopping, many consumers are heading to their laptops instead of a physical mall. According to a 2015 New York Times report, 3% of all malls in the US are “dying” (with a 40%+ vacancy rate), and 20% of all malls are “troubled” (with a 10%+ vacancy rate). In fact, DeadMalls.com found that Maryland has 12 dead malls in the state.
Given the sheer size of empty shopping malls, commercial real estate investors have been scratching their heads as to what should come next. Thankfully, there are a few creative solutions.
Shopping malls have a lot of valuable commercial space, ranging from several hundred thousand to over a million square feet. Traditionally, malls have been home only to major department stores or specialty chain brands. However, consumer needs have shifted in recent years. While many malls in the US are currently dead, they absolutely can be redeveloped—transformed into a new mall-like solution that offers a little bit of everything—as long as they are in a good location with relevant demographics and decent traffic. Even if those criteria aren’t up to par at that exact moment, they should show signs of improvement or promise before you spend millions of dollars in redevelopment.
Now, a major trend is transforming shopping malls into “town centers.” While this name change sounds like it’s simply semantics, it actually expands the scope of malls into something much more—places to live, work, and play without needing to get in your car. In this regard, a town center rivals the convenience of online shopping by giving you more options for shopping at your fingertips.
Town centers act as a destination: a place for friends, family, and the community to congregate and enjoy. Rather than being pigeon-holed into a shopping center, town centers bring in everything you’d want or need to do in your daily life. This way, you aren’t forced to do your shopping in different areas—town centers are the ultimate option for convenience.
Another popular approach is to combine the convenience of a closed-off shopping mall with the fresh air of an outlet mall. While both styles of mall serve the same purpose of shopping for convenience, the combination feels much more modern than the sterile environment of old shopping malls.
Furthermore, the flexibility of stores in these spaces—which often include entertainment arenas like movie theaters, restaurants, and even apartments or office spaces—means that shoppers have the ability to live, work, and play in one convenient location. Online shopping might be an easy solution, yes, but when you can literally walk out of your home to find groceries, clothes, and more, you’ll opt to do the latter for the sake of saving time and money (especially when shipping costs add up!).
As is the case with every other major development project, how you should proceed with revitalizing a dead shopping mall depends entirely on your community: its demographics, traffic patterns, and consumers’ wants and needs. For some communities, an open-air plan might work well; for others, you could consider creative options like an entertainment restaurant where an anchor store once was. Thankfully, as the definition of “shopping mall” has loosened over the years, the only limit to creating a successful mall or community center is your imagination.
Contact us today for more information on commercial real estate development opportunities.