The Conundrum Retail Real Estate Faces With Terrorist Threats

WASHINGTON, DC—The commercial real estate industry has had some unpleasant reminders recently about the threat terrorism poses to the industry—and the difficult balancing act in which potential targets must be hardened, while at the same time still made open and accessible to consumers. After all, unlike office buildings or certain facilities such as nuclear power plants, the whole raison d'être of these projects is to have as many people visit as often and as freely as possible.

Late last month, a video surfaced calling for attacks on major shopping centers around the world, including the Mall of America.

The hour long video reportedly was released by the Somali-based terrorist organization, al-Shabaab, which is believed to be responsible for the 2013 attack on the Westgate Shopping Mall in Nairobi, Kenya. A total of 67 people died in that attack.

More recently, a study spearheaded by former Homeland Security Secretary Tom Ridge advised against locating an NFL stadium in Inglewood, CA, because it could be an attractive terrorist target.

To be sure, this study was commissioned by AEG, a developer that wants to build the stadium in Downtown Los Angeles—a point duly highlighted by critics of the report including Inglewood's mayor. Still, Ridge's reasoning is sobering. The proposed stadium would be in the flight path of Los Angeles International Airport, and terrorists might try to shoot down a plane or crash one into the stadium, in "a terrorist event 'twofer'", according to an account of the report in the Los Angeles Times.

The Inglewood stadium is part of a planned retail, office and residential development at the now-closed Hollywood Park.

Then last Friday, outgoing Attorney General Eric Holder all but called on retail center owners to step up their investments in security in an interview with CNN.

"I think it would be the responsible thing for operators of these malls to increase their capabilities when it comes to keeping people safe who are just going about their everyday lives," he said.

"There are a variety of ways you can increase security, increase the presence of people who are responsible for security, cameras that you can use, a variety of techniques that I think can be employed that won't negatively impact the experience of fun that we have of going to a mall while at the same time enhancing the security of people who go there, people like myself, people like my kids," he said.

Retail centers got a wake up call with the Nairobi attacks and the major ones have been taking steps to secure the properties, working with both local and national law enforcement, according to Jeff DeBoer, CEO of The Real Estate Roundtable.

DeBoer also noted that the CRE industry created the Real Estate Information Sharing Analysis Center (RE-ISAC) shortly after Sept. 11 RE-ISAC is a partnership with federal homeland security and law enforcement agencies to receive and share information regarding potential terrorism and other security risks, and to jointly develop and implement appropriate responses, he explains.

Such measures, though, may not be enough – at least not enough to overcome the inherent conflict in trying to secure a venue that is completely open to the public.

"Malls are a large collective of retail establishments whose architectural and aesthetically pleasing design is to encourage potential shoppers to enter and linger in order to buy merchandise," Albert Goldson, executive director of Indo-Brazilian Associates LLC, a New York City-based global advisory firm, tells GlobeSt.com. Goldson is also a member of the American Association of Intelligence Officers.

"Their level of security is to guard against unruly or disruptive customers."

For that reason these guards are visible to the public – which is counter productive when protecting against terrorism, Goldson says.

"They give themselves away as the primary targets for terrorists to eliminate before continuing their rampage unimpeded."

In short, he says, "retail establishments are woefully unprepared for a terrorist attack because the nature of their business is security against internal and external information, such as cyber attacks and merchandise theft."

Goldson does have some advice for retail centers: using a mix of both armed uniformed and plainclothes security from private security services and local law enforcement.

Retail centers are already moving in this direction, DeBoer tells GlobeSt.com.

"They can't screen every visitor walking in as is done in major office buildings, but of course they do have internal security such as cameras and guards that we see, as well as extensive security actions that we don't see," he says.