"Every few years, a new shopping center design captures the imagination of the consumer," says Malachy Kavanaugh, staff vice president of ICSC. "The introduction of a new retail concept, such as the lifestyle center, is often compared and contrasted with the traditional enclosed mall.

"Unfortunately, there is little localized data available about enclosed malls, and it's difficult to make an apt comparison," he continues. "We have put together a white paper on the current state of the enclosed mall industry that we believe illustrates the enclosed mall is and remains a vibrant and healthy retail concept."

Among the findings of the data-laden study:

Putting specialty retailer profits and same-store sales data together, the numbers show that mall tenants are currently enjoying industry-leading same-store sales, operating margins and after-tax profit growth, according to the report. Specifically, for FY '03, mall retailers showed an after-tax profit increase of 50.3% over 2002, and for the first half of 2004 profitability made a leap of almost 100%. And, according to ICSC's Monthly Mall Merchandise Index, mall specialty retailers showed year-over-year growth of 5.2% in sales per sf through August.

In terms of filling space, mall occupancy has reached all-time high levels, reaching the 92% range, and mall rents have continued to grow. That's partly because mall developers have controlled the amount of new space coming online, according to the report.

At the same time, malls have reduced their dependency on department stores to occupy anchor spaces. And while the sales performance of department stores has improved over the past year, that's mostly because discretionary spending in general has improved, and "the vitality of the department store segment remains an area of concern," the report says.

And the behavioral benchmarks "indicate that regional mall shoppers are not shopping with any less enthusiasm," the report says. Specifically, mall shoppers averaged 38 trips per year last year, the same number as back in 1996. Trip duration has increased, from 77 minutes in 1996 to 82 minutes in 2003. And average spending at mall shops increased from $28.40 per trip in 1996 to $42.20 last year, adjusted for inflation.

Finally, according to the ICSC report, the verdict of the investor community on regional malls "has been unambiguous—mall REITs have outperformed the broader market on a five-, three- and one-year time horizon.

The report also lays out the reasons regional enclosed malls have held up well in the face of competition from newer retail concepts, beginning with location. "Most malls are located in high-traffic suburban areas and have a trade area draw of up to 25 miles."

The report also cites tenant mix, including strongly differentiated specialty retailers, innovative food offerings, adaptability to new consumer trends on the part of mall leasing teams, and the ability to incubate new concepts, notably kiosks and carts. The study also mentions instances where off-mall retail concepts have moved into the mall picture: "An excellent example is the extremely successful Urban Outfitters, primarily an open-air retailer that is now in the midst of a mall roll-out."

Finally, there's the basic premise of most malls: They're enclosed and air-conditioned. "Malls offer a consistent year-round shopping environment, they are relatively more attractive during episodes of extreme weather [and] shopper comfort is a distinct plus during the holiday season when weather may be extreme. This is the make-or-break season when retailers make 40% or more of their annual profits."