Well Located Traditional Malls

Well located traditional malls, Class A, continue to thrive with the tried and true retailers around the country (think King of Prussia Mall).  When an anchor tenant falls on hard times in these malls (Sears, JC Penney, Macy’s, etc) the space is backfilled rather quickly with up and coming stores or new restaurants.  The lease rates also continue to hold and slightly increase in these centers as demand continues to be strong.

The Class B and C malls are a different story

When large tenants leave these malls it can be years before the space is reoccupied or re-purposed.  We are seeing many malls turned ‘inside out’ where the core of the malls is torn down and replaced with smaller outdoor, lifestyle, layouts.

Additionally, some of these malls are converted to other uses altogether, like apartments, entertainment venues, call centers or warehousing.  Zoning plays a role in these modifications and can take years of planning to effectuate the changes.

Precipitous climb of the e-commerce convenience

There will continue to be a place for shopping malls despite the precipitous climb of the e-commerce convenience.  People like to be social and go out and touch the products therefore there will always be a need to provide brick and mortar shopping experiences.  However, we will continue to see and evolution of the shopping center with the injection of entertainment (Dave and Busters, indoor flying, tavern movie theaters, etc) to replace some of the traditional store floor space.

It is a misnomer that everything has to be adjusted for the millennial’s and younger shoppers – everyone of all ages has different needs and preferences for the shopping experience and the malls as well as the e-commerce sites need to continually adapt to the current trends to achieve the foot traffic and eyeballs necessary to turn profits.

Changing mall configuration

We don’t see the mall configuration changing dramatically overnight.  Rather it is a gradual adaption to the needs of the consumers and the health of the stores that make up the malls.

Malls will continue to morph in areas where shopping patterns have changed by adding groceries, entertainment, technology, restaurants, and in some cases,  apartments, warehousing, senior living complexes to bring the consumer to the doorstep.

People still need to shop, but the options need to becomes more varied in markets where competition have moved the needle.

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