Creating Malls Where Visitors 'Never Run Out of Things to Do'

Mall operators are turning away from heavier retail offerings and instead trying to “create an experience where our guests never run out of things to do,” according to Starr Cumming, retail director of the Southeast region for Hines.

She tells GlobeSt.com that consumers are demanding more out of their shopping and dining experiences, especially coming out of the pandemic.

Her Atlantic Station retail district’s strategy, as such, encourages shoppers to stay on property longer and longer dwell times in turn support surrounding retailers and restaurants.

PREIT Portfolio is 14% Dining and Entertainment

Joe Coradino CEO, PREIT, tells GlobeSt.com that experiential tenants have become a staple in many mall owners’ portfolios, including PREIT’s. Today, its portfolio consists of 14% dining and entertainment.

“Recognizing the U.S was over-retailed, we proactively replaced obsolete department stores with these sought-after destinations,” Coradino said.

“Since 2006, we started to add more and more sit-down dining experiences to our properties, diversifying the traditional mall tenant mix. Since then, we have really elevated our experiences, including entertainment options such as movie theaters, Tilt Studios, LEGOLAND, craft experiences, etc. – extending dwell time and expanding trade areas, giving more reasons for shoppers to visit us.

“Our vision for our properties is to serve the community as a multi-use hub where consumers can fulfill a range of needs from life to commerce.”

Landlords Now ‘More Open’ to Idea

LeDonna Spongberg, Senior Vice President with Edge Realty Partners, tells GlobeSt.com that from a tenant perspective, “some of the best locations in desirable markets are in regional shopping centers, and these have historically been difficult for entertainment concepts to lease.

“Now, landlords are more open to these uses and my entertainment clients can take advantage of the center’s regional pull and access to a necessarily large parking field, while the tenants add a new traffic-driving component to the center.”

Spongberg said that from a landlord’s perspective, entertainment uses are terrific options for former anchors.

“These uses also create a unique point of difference for the center in the market, enhancing the shopping experience for customers who have another great reason to visit the center,” she said. “Entertainment tenants also activate customer visits, extending evening hours and potential weekend visits, when the center might typically be slower. This opens the potential for other restaurant and experiential uses to add to the center’s mix – in some cases, even a hotel can activate infill development.”

Consider Restrictive Covenants

Terrison Quinn, managing principal, SRS Real Estate Partners, tells GlobeSt.com that given how broad the experience and entertainment category has become, in addition to the growing demand for such experiences, there are a lot of directions mall owners can go to fill space within larger projects.

“The bigger question might be how restrictive their operating covenants and prohibited uses might be for a particular asset given so many projects are still governed by antiquated CC&Rs and in some case held hostage by such antiquated documents or having partners that don’t see the value yet in adding more entertainment uses.”

Technology-driven experience concepts like the Van Gogh Exhibit, COSM, Superblue, Arts District and other emerging groups are gaining favor, he said, not to mention, pickleball.

Immersive Flying Rides, the Latest

Michael Meagher, president of McHugh Construction, tells GlobeSt.com that amidst attractions, culture, dining and shopping, McHugh Construction is building a new attraction at Navy Pier in Chicago – FlyOver Chicago.

The immersive flying ride will take guests on a multi-sensory journey as they soar over iconic locations and natural wonders from around the globe as part of a cutting-edge experience, he said.

“Building entertainment venues is one of our specialties, and we’ve seen an uptick this work over the past year,” said Meagher, who recently completed FanDuel Sportsbook Lounge in the United Center and is restoring the historic Ramova Theater on the city’s near South Side into a concert venue with an adjacent restaurant and brewery.

CBL Creating ‘Entertainment Destinations’

CBL Properties recently announced the addition of Tilt Studios to its two North Dakota properties, Dakota Square in Minot and Kirkwood Mall in Bismarck, as well as Stars and Strikes at Coastal Grand in Myrtle Beach, S.C., and Main Event at Cross Creek Mall in Fayetteville, N.C.

“We are pleased to further diversify the mix of tenants available at each of these properties, solidifying them as entertainment destinations in their respective markets,” Stephen Lebovitz, chief executive officer, CBL Properties said in prepared remarks.

“Over the last several years we’ve experienced an increase in demand from entertainment users, opening 11 large-scale family-friendly entertainment options across our portfolio since 2017 with nearly a half dozen more in various stages of negotiation.”

Who Will Carry the Bags?

Edie Weintraub, managing director, terra alma, tells GlobeSt.com that it is not surprising that mall owners are backfilling their empty department boxes or big box spaces with entertainment.

“In a continual move to try to drive traffic to what has historically been heavy retail centers with some food, entertainment and food are the new traffic drivers,” Weintraub said. “However, it’s hard to imagine that the entertainment will drive sales, as most people who come to be entertained will not want to carry bags with them.”