The reimagining of the enclosed mall as a fresh and vastly expanded version of what it was initially intended to be – a place luring consumers with a myriad of tempting shopping and dining choices and renewed social connections – is underway in many suburban centers.
A prime example is the Tri-State region of New York, where more than a dozen malls are in various stages of redevelopment, according to a new report from CBRE.
“While some properties are densifying their sites by adding housing, hotels, and additional retail to adjacent parking lots and pads, some shopping malls are being fully or partially demolished to make way for entirely new uses,” the report noted. “In both cases, mixed-use environments contribute to the lifestyle vibrancy that is a critical element for communities to thrive.”
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Though some malls continue to struggle, the redevelopment movement aims to lean into a sense of place, creating an inviting environment that encourages visitors to linger, the report said. In addition to enclosed malls, lifestyle centers with an outdoor orientation are expanding. Historically, both types have had lower vacancy rates than neighborhood and power centers.
Garden State Plaza in Paramus, NJ, which has been described as the most significant retail destination in the U.S., is one example of a mall that will expand its offerings and its potential clientele through redevelopment. The owner, Unibail-Rodamco-Westfield, will add medical offices, a transit center, and nearly 1,400 apartments, as well as 230 senior housing units, to the property, along with additional retail space and a seven-story hotel. It will also create a one-acre “town green” for outdoor markets and gatherings, intended as a new town center for Paramus, offering walkability, sustainability, and multi-generational living, according to the developer.
The report cited Green Acres Mall in Valley Stream, N.Y, on Long Island as an example of a lifestyle center redevelopment. In these developments, large portions of enclosed shopping malls have been demolished to create outdoor-oriented public spaces. “By turning the enclosed shopping mall 'inside out,' the appeal of a shopping destination with a social component is preserved while creating a built environment that attracts a wider variety of customers and retailers,” the report said.
The revamped Green Acres will comprise 400,000 square feet for $150 million. Former department stores will be demolished or repurposed to open sightlines and make way for more top brands. “The project will include a new grand entrance along with attractive streetscape showcasing outward facing shops as well as full service and quick service restaurants, grocery, entertainment and service uses,” according to the developer, Macerich.
The report stated that the reinvention of Tri-State’s malls will result in the removal of 4.3 million square feet of retail space. Most of the new development adjacent to malls will be residential, adding 1.3 million square feet of housing.
More than 12 malls have changed hands in the region since 2015. Prices have varied based on performance, location, and the new owners' goals. The weighted average price for shopping malls that did not have post-sale development plans was $225 per square foot, $125 per square foot for properties intended for experiential retail redevelopment, and $104 per square foot for malls slated for full or partial demolition.
“For retailers, these redevelopments create fashionable and vibrant centers where shoppers want to linger and enjoy a variety of experiences, opening the door for a diverse roster of potential tenants,” the report commented. “For developers, the combination of large and graded plots of land, a strong political will to maintain the relevance of centers of employment and tax revenue, and a trend toward mixed-use lifestyles offer a rare opportunity to create dense developments in some of the most desirable and regulatorily restrictive communities in the region.”
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