The American shopping mall is dead! Or so some would have you believe. Since 2010 two dozen US shopping malls have closed. In the Atlanta suburbs we have recently seen the closing of Shannon Mall which is now being converted into a movie studio. Other malls like Southlake, Greenbriar and Gwinnett Place malls are arguably struggling. A proliferation of news articles and opinion pieces emphatically state that the enclosed mall concept is a thing of the past. Many believe, and would have everyone else believe, that malls which aren’t yet dead soon will be. But before we place the final “RIP” placard on the mall, it might be worthwhile to consider some other factors. Malls don’t die because the idea of an enclosed shopping venue is unattractive and obsolete. They die because demographics shift, shopping habits change, mall owners face financial challenges, malls become overly saturated with the same stores and merchandise, or a better retail venue is built nearby.
Cooper Carry retail designers Angelo Carusi and Gar Muse take a serious look at the facts and figures to declare that the American Mall is not dead and is not dying.
12. Some malls have declined due to the
consolidation of anchor tenants
13. IN 1990, ANCHORS LIKE RICH’S,
BLOOMINGDALES, MARSHALL FIELDS,
HUDSON'S, DAYTON'S AND MACY’S
WOULD FIGHT OVER SPACE IN MALLS.
Some malls have declined due to the
consolidation of anchor tenants
14. That’s not the case today.
Macy’s BOUGHTthem all!
Bloomingdales
Marshall FieldsHudson's
Dayton's
Rich’s
18. The first mall in the US was not created
by a merchant, but by a sociologist!
Victor Gruen understood the need to create a
centralized community to battle the American
suburb of cul-de-sacs, clubs and carpools.
Victor Gruen understood the need to create a centralized community
to battle the American suburb of cul-de-sacs, clubs and carpools
19. People want to be with other people….
Gruen understood this basic need
and he created a way for that to be
possible…..20th century-style
20. People have been coming together to
formally socialize since at least the
10th Century B.C..
21. The Census Bureau estimates there will
be more than 88 million people over 65
in America by 2050, more than twice
the current figure.
That alone gives modern malls a
core customer base.
another reason…
23. Just one more reason….
According to data released by the
International Council of Shopping Centers,
occupancy rates increased, the highest
since the throes of the recession,
in second-quarter 2008.
24. End of 2014,
mall occupancy UP
sales per sq ft UP
The BEST since 1987
Source: Retailing Today
25. This is worth repeating….
End of 2014,
mall occupancy was 94.2% -
The BEST since 1987
Source: Retailing Today
27. Let’s compare Mall OCCUPANCY
to office buildings –
end of 2014
Office occupancy
83.2%
Mall occupancy
94.2%
Both are types of real estate
28. WE DON’T HEAR PEOPLE
SHOUTINGTHAT OFFICE
BUILDINGS ARE DEAD!
29. Only 3.4% of all malls
are considered “dead”
40% OR MORE VACANT
(CONSIDERED DYING)
20% - 40% VACANT
(CONSIDERED UNHEALTHY)
10% TO 20% VACANT
(CONSIDERED A SIGN OF
TROUBLE)
20%
15%
10%
5%
0%
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14
Source: New York Times Jan 3, 2015
40. It seems like much of the mall
repositioning is taking place in dense
urban environments
41. Take Landmark Mall near Washington, DC
for example
It seems like much of the mall
repositioning is taking place in dense
urban environments
42. Take Landmark Mall near Washington, DC
for example
Landmark Mall is ADAPTING
It seems like much of the mall
repositioning is taking place in dense
urban environments
44. Built in 1965, the mall lost its luster and its
owner suffered a financial crisis
Landmark Mall is ADAPTING
45. The mall is being repositioned by new
owners to become more of an urban
mixed-use project.
Landmark Mall is ADAPTING
46. Some stores are demolished and apartments
being added will increase local population.
The roof comes off.
47. Landmark Mall is ADAPTING
Circulation is improved by reshaping and
reorganizing the vertical circulation and making
the entire space more walkable and appealing.
48. Repositioning required cooperation
from many stakeholders
• Department stores
• Existing mall retail tenants
• Office tenants
• Government agencies
• Mall owners
Landmark Mall is ADAPTING
51. So far what have we learned?
Malls die when they don’t adapt
52. So far what have we learned?
Malls die when they don’t adapt
Too much of the “same” retail hurts malls
53. Malls die when they don’t adapt
Too much of the “same” retail hurts malls
Rents are on the increase
So far what have we learned?
54. Malls die when they don’t adapt
Too much of the “same” retail hurts malls
Rents are on the increase
Sales are on the increase
So far what have we learned?
55. Malls die when they don’t adapt
Too much of the “same” retail hurts malls
Rents are on the increase
Sales are on the increase
Mall NOI is on the increase
So far what have we learned?
61. Wrong!In a 2014 OpinionLab survey:
• 85% of Millennials plan to head to the mall at least
once this summer
• 60% say they will go at least once a month
• Nearly half (48%) of Millennials rank browsing
different stores as their #1 reason to go to the mall
• Only 1 in 10 Millennials says nothing would
motivate them to spend more time in the mall
Source: OpinionLab
63. For Retailers Appealing To Millennials
"It's less about commerce first more about engaging the consumer
Source: Aria Hughes, an editor for the online trend forecaster WSGN
&
64. “The mall that’s dead
probably needed to be. “
-Angelo Carusi
Principal, Retail Design
COOPER CARRY
65. Why.
“Because it did not (or would not) change to meet the needs
of the consumer. For over 2,000 years people have sought
venues in which to socially interact with others. Malls have,
and always will, provide that forum and space. It’s innate in
us, as human beings, to want to be around others. We have
found in malls a way to socially interact while filling another
basic need which is tending to the desires of the head, heart
and stomach. What better way to do that than with a retail
store, coffee shop or soothing water feature close by.”
-Angelo Carusi
Principal, Retail Design
COOPER CARRY
66. To sum it up . . . . .
“Almost from their beginning, malls told stories. Shoppers,
municipalities, tenants and even developers contributed to
the fabric which when woven together resulted in dynamic
places and spaces that became places to not just shop, but to
gather. Not much has changed in the essence of the mall.
What has, and always will change, is the demographics,
shopping preferences and retail itself. This requires that malls
change as part of the evolutionary process. It doesn’t
necessarily mean that all malls are dead. It does, however,
mean that all malls can die. It’s the mall’s sensitivity to
change combined with the will to do so that will live on.”
-Gar Muse
Principal, Retail Design
COOPER CARRY
67. Let’s start a conversation…
COOPER CARRY, 191 Peachtree Street NE, Suite 2400, Atlanta, GA, 30303, 404-237-2000
Angelo Carusi, AIA, LEED AP,
CDP, CRX
Principal –
Retail Specialty Practice Group
angelocarrusi@coopercarry.com
404-358-4815 - cell
Gar Muse, AIA
Principal –
Retail Specialty Practice Group
garmuse@coopercarry.com
404-219-3895 - cell
68.
69. Credit where credit is due:
• The Economics (and Nostalgia) of Dead Malls The New York Times, Jan. 3, 2015
• N. American REIT & Real Estate Research Reports, Green Street Advisors, 2015
• Victor Gruen and the Birth of the Shopping Mall, Labelscar, Aug. 22, 2012
•The De-Malling of America: What's Next for Hundreds of Outmoded Malls?,
CoStar, Oct. 3, 2012
•Opinion Lab: Fresh insight into millennials, malls & the future of the store,
March 30, 2014
•Retailing Today: Report: Malls not dead, far from it. March 30, 2015