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Renovation Wave: Breathing New Life into Malls
Mall owners are deploying a host of strategies to captivate shoppers’ attentions. A study by JLL Retail found that the primary ways malls are changing include renovation and redevelopment, adding food and entertainment, incorporating a mix of uses, creating community spaces, rebranding by ditching “mall” in names, converting to a new use, and razing and rebuilding.
The effort to earn a coveted spot among the elite shopping malls pays off since top tier U.S. malls command average asking rents of $72.44-per-square-foot, more than 3.5 times higher than the average asking rent of the second tier of malls. While market location plays a big role in determining which malls make the upper echelon, owners can improve footfall and create value through improved aesthetics coupled with an appealing tenant mix.
Since 2014, JLL researchers found more than half of the 90 malls that underwent renovations or launched one had spent more than $8 billion upgrading retail space across the U.S. Most major mall renovations fell into four categories:
- Food and fun: improve or add new food and beverage and entertainment options
- Community connections: change the way malls serve communities by converting the space into lifestyle and power center-like projects, adding non-retail uses to create mixed-use projects, dedicating space for community use or designing new open spaces
- Facelifts: re-brand to make malls more marketable through common area improvements, tenant upgrades, and even name changes
- New uses: partially or completely convert to other non-retail uses
Upgrading food and beverage (F&B) is the most popular mall renovation strategy. Most mall owners are creating foodie destinations in an effort to capitalize on America’s love of food. Space dedicated to F&B within malls is up to roughly 9% of total GLA, up 5% from a decade ago, and may reach 20% by 2025. JLL found F&B is the most popular type of renovation (41.1%), and, of those same malls, 55.3% combined F&B with upgraded or new entertainment offerings to maximize the shopper experience.
An interesting trend in the effort to reinvent a mall is to actually ditch the word Mall in the name. The “M” word was removed during the renovation process in 18.9% of malls studied by JLL. The goal is to shed the image of the now outdated mall of the last century, instead opting for names that create a sense of a smaller, more intimate community, with words like “Shoppes,” “Towne Center” and “Village.”
*Pictured Manhattan Village, Manhattan Beach, CA
For comments, questions or concerns, please contact Dennis Kaiser
