Big challenges for many enclosed malls can mean big redevelopment opportunities given the right plan and team.
‘You had to be there’ has been the common refrain when a message doesn’t quite get through to its intended audience. Despite the e-commerce revolution and a paralyzing pandemic, retailers are still getting the message that most shoppers still go to stores. They want to be there. In fact, 87% of consumer sales happened on site within brick-and-mortar stores in the third quarter of 2021, according to the U.S. Department of Commerce’s retail sales report.
It’s certainly not business as usual though, especially for enclosed malls, which have been hit the hardest by not only the social restrictions of the past 21 months, but also evolving omni-channel sales and digital marketing strategies. The asset class has experienced four consecutive years of increasing vacancy, according to CoStar Group, and Coresight Research estimated in August that 25% of America’s roughly 1,000 malls will close over the next three to five years, as reported in REBusiness Online. More than 20% of larger conventional malls plan to convert to “hybrid configurations” combining retail, office, residential and other alternative uses in the next few years, according to the Directory of Major Malls.
That tough real estate reality will produce an “enormous challenge of redeveloping what were once core community assets into viable investment opportunities'' for mall owners and community stakeholders, asserted Glenn Brill, managing director of FTI Consulting Inc. He said that there is good news on that front though: Those dark, dead malls often possess location attributes (access, visibility) and infrastructure (ring road, stormwater management, etc.) that inherently give them redevelopment potential.
Brill says successful redevelopment starts with a vision, and the most popular alternative, adaptive reuse, is not always the best route to take. Tactics such as phased infrastructure improvements, the subdivision of parcels and recapitalization are important, of course, but teamwork is essential. Understanding communal needs, including the substantial loss of fiscal revenue to the municipality, will light the right path to the best redevelopment master plan and enable the leveraging of critical investor, community and government partnerships, according to Brill.
“Ultimately, a dead mall must be approached as an opportunity to participate in local community and economic development,” Brill added. “Changes in land use can accommodate generational shifts in demographics, development trends and community needs.”
From crafting a new brand to refreshing one that may need a facelift — or a development that just received a facelift — our belief in teamwork, creativity, innovation and endless possibilities sets up well for the next retail challenge, including complex, transformative mall redevelopments,” said Tim Patton, infinitee’s CEO.
The experienced team of brand makers, storytellers and creative advocates know all about innovation to achieve retail reinvigoration. With the right marketing, mall redevelopments can spread benefits around to not only consumers, but also job seekers, community stakeholders and the local municipalities. Such successful place-making or remaking will have people saying, “You gotta go there.”
