Ahead of its time? That’s one way to look at Mall of America in Bloomington, Minnesota. This mall isn’t just a place to shop. It’s a destination, with an amusement park, aquarium and flight-simulator ride. Today, malls across the country are emulating Mall of America’s approach, adding experiences to their roster of stores.
It’s a way to keep the business flowing as customers’ shopping habits evolve. If customers can order shoes, dresses, purses and flat-screen TVs online, why would they go to the mall? Savvy mall owners have discovered the answer: to get an experience that they can’t get online.
Successful malls today, both outdoor and enclosed, are evolving, adapting to meet the changing demands of consumers.
Dan Spiegel, senior vice president and managing director at Coldwell Banker Commercial, sees this firsthand. Coldwell Banker Commercial handles the leasing assignments for malls across the country. Company officials, then, have gained an understanding of what works for malls today and what doesn’t.
The challenge for mall owners? What works in one location might not work in another. Indoor miniature golf and adult-themed bowling alleys might bring in big crowds in some communities. In other locations, creating a downtown feel with pedestrian-friendly walking paths and center greens might be the better option.
It’s up to mall owners to decipher what will work in their community and then make the changes happen.
“Everything depends on location,” Spiegel said. “It depends on what customers are looking for in a location. Often, people are looking for a reason to go to a mall. If you can provide that, you can help bring in the traffic. Maybe shoppers will come to bowl or see a movie. If they can get drinks afterwards or do some shopping, they might be more willing to spend more time at a mall.”
Mall of America in the Minneapolis-St. Paul market remains a good example of this, with everything from Crayon-making lessons to rollercoasters and sharks acting as draws.
“Mall of America is what so many other malls are trying to turn into,” Spiegel said. “That mall was ahead of its time in terms of offering people a destination.”
Multifamily housing?
Unibail-Rodamco-Westfield has unveiled a plan to revitalize Skokie, Illinois’ Westfield Old Orchard shopping center. These plans include the demolition of a vacant Bloomingdale’s anchor store and the addition of about 350 apartments on that site.
The Paris-based owner hopes that the residential component brings new life to the outdoor mall that opened in this Chicago suburb in 1956.
In a statement, Skokie Mayor George Van Dusen said that Old Orchard mall has long been an important economic engine for the village. That’s why it’s so important for the mall to continue to evolve, he said.
“Westfield and URW’s commitment to significantly invest and transform Old Orchard continues both this important economic growth and the village’s long-standing, collaborative partnership with property ownership,” Van Dusen said in his statement.
In Sterling Heights, Michigan, Lionheart Capital is embarking on a $1 billion redevelopment plan for the 110-acre Lakeside Mall. Under the plan, much of the mall itself will be razed and transformed into residential, retail and recreational uses.
Plans call for the addition of 2,800 multifamily residences, which will inclue 750 seniors housing units, and 150,000 square feet of retail shops and restaurants. The site will also be home to 60,000 square feet of office space and a hotel with 120 rooms. In addition, Lionheart capital will donate 30 acres to be used as a park.
“We are pleased to see the future of Lakeside Mall taking shape,” said Mark Hackel, Macomb County Executive, in a press release. “Hall Road is a vital economic corridor for all of Macomb County, and the continued transformation of Lakeside will lead to additional interest and investment in the corridor.”
The redevelopment plan will take about 10 years.
The addition of multifamily units to retail centers is a trend that is gaining momentum, Spiegel said.
“We are in the first phase of this now,” he said. “Developers are waiting for the results to see how successful it is.”
The trend, though, makes sense. As Spiegel says, the country needs more housing. And it especially needs more apartment units.
At the same time, people are interested in living in a community in which they can walk to restaurants, shops, movie theaters and bars. Apartment units built in an outdoor mall setting can provide this.
“The multifamily component provides that urban lifestyle but often in a suburban location,” Spiegel said. “People will drive for a downtown, urban experience. But they want it in the suburbs. They don’t want to have to drive to the downtown of a major city. They want that downtown experience closer to home in the suburbs.”
A trend that supports this? Mall owners are increasingly working to turn their outdoor retail centers into more pedestrian-friendly areas. This means the addition of grass-lined walkways and central park areas with seating.
But the retailers surrounding these green spaces? They are often the type you’d find inside an enclosed mall, places like the Gap; trendy soap maker Lush; sports apparel company Lids; or American Eagle apparel.
The feel, though, is of a pedestrian-friendly downtown community.
“There might even be apartments over the stores,” Spiegel said. “The current consumer trend is a desire for that pedestrian, urban feel. That is the new kind of mall that is doing well today.”
And what about enclosed malls? What can they do to stay relevant today? One step is to bring in experiential real estate, everything from high-end bowling alleys to arcades with the look and feel of an entertainment center you’d find in the heart of Tokyo.
Spiegel says that these experiences can bring customers to a mall and pry them away from their laptops and phones.
The Meadows at Lake Saint Louis, a mall in the St. Louis, Missouri, market replaced a former Bed, Bath & Beyond store with the Paddle up Pickleball Club — an entertainment offering courts for fans of pickleball, a game that is a sort of combination of racquetball and tennis — this summer.
In Edina, Minneapolis, Puttshack, a chain of indoor miniature golf centers, will soon open its first Twin Cities location in the Southdale Center mall. Officials with Puttshack estimate that they will open the location in the spring of 2024.
“Upscale, experiential brands like Puttshack are exactly the type of stand-out offerings we’re committed to bringing to this community as we forge forward with the progressive transformation of Southdale Center,” said Judy Tullius, the mall’s general manager, in a written statement.
Experiential real estate allows malls to compete with online shopping, Spiegel said.
“If people aren’t going to the mall as much because they are shopping online, you need to give them a new reason to come out,” Spiegel said. “Multifamily is a reason to be there. Experiential retail is a reason to be there. You can spend a day at the mall. Maybe you have a movie theater that serves drinks. You can stay at the theater and have some microbrews before doing some shopping. The mall becomes more of a destination.”
Future warehouse sites?
Not every mall, though, can be saved. Some will need to be demolished. They’re just too obsolete.
What happens to these spaces? They might become warehouses.
While online shopping has been a challenge for malls, it’s been a boon to industrial real estate. Companies need to ship their products to customers quickly. To do this, they are opening warehouses and distribution centers across the country.
Finding space for these centers can prove challenging. But old malls? They often occupy a significant number of acres, more than enough space to build a new warehouse.
That doesn’t mean that every old mall can become a warehouse. Some malls are located so close to residential areas, that neighbors might not approve of seeing a warehouse rise up. Developers might not want to take on the fight of winning over these reluctant neighbors.
“A warehouse might be the highest and best possible use for a former mall site,” Spiegel said. “But sometimes it’s not feasible.”
A brighter future?
Not surprisingly, malls struggled during the height of the COVID pandemic. But since the pandemic has ended? Malls, especially outdoor ones, have seen a resurgence.
Spiegel said that COVID wasn’t really the biggest challenge that malls have faced. Many malls were already struggling before the pandemic hit. They were facing a bigger obstacle: changing consumer habits.
“Shopping trends change over time,” Spiegel said. “I remember when I was a teen thinking that malls were the coolest places to hang out at. Flash forward to today, and that’s changed. People want something more than an enclosed space. COVID was another impetus for mall owners to rethink what they have. Some malls have taken steps forward. They are transitioning to offering the types of real estate that people want.”
