The So Uncool Burbs
The use of public transit hit its highest level since 1956--transit ridership has increased 37% since 1995, well ahead of population growth and vehicle miles traveled (a 20% increase), according to the American Public Transportation Association. Add these transit ridership numbers to the tidbit (pizza crumb) about the recent bankruptcy filing of Sbarros and the ongoing woes of J.C. Penney and Sears—former highflyers at regional shopping centers. At the same time, the highest per square foot retail real estate prices are not registering in suburban malls, but along high-street urban corridors in the vibrant U.S. gateway hubs (served by mass transit) where young people and their parents continue to relocate from unexciting, congested, and ageing badly burbs. And so last Sunday it wasn’t surprising when…
I dropped my niece and a college buddy off in one of those in-close Jersey suburbs so they could catch a ride back to campus after spring break—one had been to South Beach, the other on a Caribbean Island while I had been left freezing behind in extended Northeast winter... working by the way. They were both extremely thankful that my lift eliminated the need to take a bus from Port Authority for their meet up and gave them an extra hour to sleep in on their last day of vacation. It took 20 minutes to shoot across the GW Bridge from Manhattan--light Sunday morning traffic and the absence of traffic study lane closures made the trip an atypical breeze. It was about the only time during the week that I would have made the offer, figuring (correctly) that we could avoid agita-inducing snarl-ups.
As we crossed the bridge both girls, who grew up in big cities, began the snarky comments about New Jersey—“what would I do living here” and “why would anyone want to go here.” They couldn’t stop chirping about the small, déclassé houses and the sub compact cars parked in the driveways. Thankfully I drive a Lexus or why would they drive with me?
After getting off her plane at JFK my niece had spent Saturday taking the subway, roaming around, and shopping in the city—she needed ballet shoes for a class and found them easily at a specialty store off Times Square. No need to traipse over to Paramus Mall or Garden State Plaza—do they have stores that sell ballet slippers in those suburban centers anyway? The whole idea of hanging out in a food court, eating a Chick fil a or Sbarros, and then seeing a cheesy flick has become so 1990s, don’t you know? She and her Spring Break pals had been cooking up “healthy breakfasts” and fresh dinner pasta recipes between sunning pool side and jumping into the ocean.
After we made a left off Van Buren (neither girl knew that the street was named after a President) we pulled up to their friend’s house—“her dad is a chemist, what would that be about?” And I guessed right their girlfriend wouldn’t have a tan. My niece suddenly mused that “it takes a lot of money to live in the city.”
No the mall is not dead, but its market is steadily weakening. Increasingly the suburbs—especially around the major cities—will concentrate people making less, while the urban cores will attract more of the affluent. Young people will continue to aspire to live near the downtowns, while their parents who can afford to make the switch, will continue the move back in trends we have been seeing for more than a decade. It’s the folks facing wage erosion and pension cutbacks who increasingly will dominate suburban populations, and need more public transport (like those Port Authority buses) to get into the cities for their jobs. Otherwise, caught in traffic many of these folks will use the e-commerce route to shop not only to save time, but also their sanity. And yes, we will continue to see the weaker suburban malls go dark while the stronger centers attract the stronger retailers, catering increasingly to a struggling, even more value conscious middle market.
As for my niece—will she marry well, get a good inheritance, or make her own way in the bright lights big city (would studying up on her Presidents or taking more science courses help her chances)? If not, there’s always driving over to Garden State Plaza in a Civic or tripping into town through the Port Authority.
Interested in retail? Don't miss RealShare NET LEASE in New York on April 15-16.