An increasing number of U.S. enclosed shopping malls are suffering from declining sales and closure of major retailers. Green Street Advisors, a real estate and REIT analytics firm, project that about 15% of U.S. malls will fail or be converted into non-retail space within the next 10 years. Another retail consultant projects that as many as half of America’s shopping malls will fail within the next 15 to 20 years. That projection is also fed by the fact that no major enclosed malls have been built since 2006.
Of the roughly 1,000 malls in the U.S., about 400 cater to upper-income shoppers. For these malls, business is improving. For the others, business is in decline. Several reasons include internet sales increases, shopper frustrations with gridlock to get to the mall, difficult parking, noisy interiors and increased kiosk sales with aggressive salespeople. Malls that seem to be successful have storefronts that shoppers can enter from the parking lot, for easier and quicker ingress and egress.
The successful malls are being enhanced/improved by the addition of housing adjacent or very close, additions of open, light “community” spaces with fountains and music, lots of restaurants, movie theaters, etc. These encourage a one-stop, multiple activity experience.
The unsuccessful malls are being converted to community colleges, business offices, and health care facilities.
We have a great example of this effort to enhance the shopping experience with what is happening in Bridgeport Shopping Mall, just off I-5 near Tualatin. It is refreshing to see retail owners who are being aggressive and planning a positive approach to maximize their investment by enhancing and improving the entire experience for their customers.
Source: Business Insider (Jan 31, 2014) and The New Yorker (Mar. 11, 2014)