Several mall owners and retailers have reported strong growth over the last quarter, as the era of the "standard 80s-style mall" comes to an end and a new model of malls functioning as a town center comes into vogue.
A new retail market outlook from JLL looks bright (for some companies, at least), and a winner seems to be Simon Property Group, which inked 1,100 leases totaling 4.4 million square feet in the first quarter. SPG's leasing volume exceeded the same periods in 2019 and 2020. Active retailers include American Eagle, Levi's, Urban Outfitters as well luxury retailers Prada and Louis Vuitton and clicks- to-bricks retailer Warby Parker.
In keeping with the mall-as-town-center trend, SPG is also converting part of a vacant Sears in Burlington, Mass., into an upscale dining hall to include Fogo de Chão, Parm, Bennett's Sandwich Shop and Shake Shack. The location is slated to open this fall.
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The report also parses growth across various geographic regions, with the Sun Belt emerging as a definitive leader in retail performance over the past quarter. Nordstrom reported strong growth (a 44% increase in net sales year-over-year, to be exact), and its stores across the South performed 7 to 10 percentage points better than their counterparts up north.
"Of particular interest is what shoppers are buying," the report notes. "There has been a noticeable boost in sales for dresses, handbags and makeup—a clear hallmark that consumers are looking forward to gathering socially once again. We can look forward to a slew of weddings during the second half of the year, as couples who postponed nuptials during the pandemic head to the altar."
Overall, mall development remains low, at 4 million square feet. Most of those projects are redevelopment deals or mixed-use additions.
According to a recent CoStar study of 37 malls, mixed-use properties are commanding higher rents. Of the properties studied, 86% had added or planned to add multifamily, 65% office and 51% hotel.
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