A reader who uses the name “Compare Decide” shared this rather interesting compilation on the issue of failing malls in America. I’m sharing the email in full.
There was an interesting debate on your blog between a commenter who asserted that retail space can be repurposed into residential spaces, and a commenter who said that transforming retail space into residential is not really an option.
So I googled “repurposed malls”. ….
The future of malls
It seems that malls can be repurposed to new uses, in particular, office space, medical facilities and educational institutions (e.g., charter schools). But there is little mention of abandoned malls being turned into residences.
http://www.npr.org/2014/09/10/347132924/heres-whats-becoming-of-americas-dead-shopping-malls
>Online shopping, the recession and demographic shifts are some of the factors killing shopping malls. And as these changes leave behind huge concrete carcasses, they're being "reimagined" into everything from medical centers to hockey rinks. First of all, a 'dead mall' is not an abandoned mall. There is a specialized terminology that the mall business uses that is explained here. A 'sealed' or 'shuttered' mall is what we think of when we think of an empty, abandoned mall.http://www.deadmalls.com/dictionary.html
Dead Mall: A mall with a high vacancy rate, low consumer traffic level, or is dated or deteriorating in some manner. For purposes of inclusion on this site, Deadmalls.com defines a dead mall as one having a occupancy rate in slow or steady decline of 70% or less.
Mall Categories:
first class mall…. regular operating mall
second class mall… high vacancy, or non-traditional store occupancy
third class mall… areas or entire mall sealed from public
fourth class mall… shuttered or slated for demolition
fifth class mall… redevelopment has begun, or is completedHere’s a list of dead malls.
It is interesting that Alabama has eight dead malls, and California has only 12 dead malls.
Also, New York has a ton of dead malls, but they don’t seem to be in New York City.
Maine has only one dead mall. Compare that to Ohio, which has 27 dead malls.
I am reminded of the pre-election maps of the US, which showed strong support for President Trump in the southeast and the midwestern and northeastern ‘rust belt’. But New England and the western US did not favor Trump. After the election, the maps showed that rural areas all over US, even places that did not like Trump, voted for Trump anyway.
The places with a plague of dead malls seem like a mirror image of Trump Land, even upstate New York.
What is going on?
From 2014, photographs and commentary by the artist Seph Lawless of defunct shopping malls.
“It’s a powerful symbol of America’s economic decline,” said Lawless. “I used to visit these malls often growing up. I remember eating cotton candy underneath the escalator and the sounds of people laughing and feet shuffling as the gentle sounds of falling water from one of the many fountains surrounded me. This was America.”
Two years later, Lawless has more photos, but with a change in perspective.
He said the story of Metro North is more about the change in American society than its economic demise. For one thing, the wrecking ball is sparing the Macy’s (M) anchor store. And rather than leaving the ruins to the rats, city developers are rebuilding the site as an open-air shopping center.
Lawless said the area around the mall is thriving with neighboring stores and businesses, and developers believe that shoppers want a retail space open to the elements, not the enclosed mall that used to be hallmark of American society.
“Their communal space is social media,” he said. “They don’t need to go to a mall where they can walk around, meet with people. There’s no need for that large enclosed space.”
But many of the other dead malls that Lawless has photographed are casualties of economic malaise in depressed regions of the Rust Belt that were once thriving.
“I’ve watched it grow. I’ve watched these large spaces become abandoned, he said. “It’s a depressing journey. It’s been a sober journey.”
He said that people who lived in those areas felt ignored and cut off from the rest of America, which is why many of them voted for Donald Trump for president: They felt he was listening to them.
“The country has definitely changed drastically in parts, and it’s an important thing for people to see,” Lawless said. “People see [dead malls] as America thriving at one point, and people what that kind of America back.”
The US is not in decline, rural areas are in decline.
But this has been going on for some time.
In the 19th century, Americans were farmers; by the 1930s, Americans were factory workers; by the 1970s, they were office workers; today, they are … truck drivers.
So today’s economy is reflected in TV shows like “The King of Queens”, where the husband is a FedEx deliveryman and his wife is an executive secretary. But they don’t live in a small town, they live in Queens, NY.
See also: “Is commercial real estate going to drive the next financial crisis?“
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Dear “Compare Decide”:
“America’s oldest shopping mall has been turned into beautiful micro-apartments — take a look inside”
http://www.businessinsider.com/americas-first-shopping-mall-is-now-micro-apartments-2016-10
“The Panorama Towers building, which was constructed in 1962, was damaged in the 1994 Northridge earthquake, and has been sitting empty ever since. In 2015, however, prolific developer Izek Shomof purchased the Welton Becket-designed building for $12.5 million and soon announced plans to redevelop the property with a mix of housing and retail. ”
http://la.curbed.com/2017/3/19/14975240/mall-panorama-city-tower-housing-development
“Redmond Town Center, the next Eastside mall expected to add lots of housing”
Portions of Eastside shopping centers are being redeveloped with hundreds of housing units, and Redmond Town Center is the latest.
Lowe Enterprises is moving forward with a 286-unit apartment project on a parking lot next to Macy’s. Lowe hopes to break ground late this year or early next, Lowe Vice President Suzi Morris said.
With online shopping gobbling up more and more sales, big box retailers have been shrinking their footprints or closing up entirely. The question is what to do with this space, and increasingly the answer is to build more housing.
“It is a trend with older lifestyle centers and retail strips,” said Morris.
http://www.bizjournals.com/seattle/news/2016/07/01/redmond-town-center-the-next-eastside-mall.html
” Malls, shopping centers getting new life as residential and retail projects ”
https://www.washingtonpost.com/business/capitalbusiness/malls-shopping-centers-getting-new-life-as-residential-and-retail-projects/2013/04/26/b89eaa5c-ac57-11e2-a8b9-2a63d75b5459_story.html
“Voorhees Town Center is the conversion of the Echelon Mall into an outdoor ‘town center; a boulevard lined by luxury apartments above upscale shops, businesses, and restaurants. The mall has been reduced in size, while the new town center features commercial space, a clubhouse, and 317 apartment units and 108 condominiums. Professionally landscaped and lighted, the Voorhees Town Center will be destination shopping at its finest.”
http://www.bartonpartners.com/project/voorhees-town-center/
thanks,
t
I wouldn’t trust any inferences from these examples until finding out more about how those projects were subsidized, financed, or incentived by government action and social engineering.
My son attended a public charter school that met for a while in a ramshackle strip mall in Kakaako with some classes in a storefront across the street. It was a good school in a challenging location, and they were only too happy to find better quarters later. I can see that abandoned malls could just as well become substandard housing as substandard educational facilities.
Not sure if you can get this:
https://www.wsj.com/articles/the-internet-isnt-killing-shopping-mallsother-malls-are-1492513200?mod=e2tw
“The Internet Isn’t Killing Shopping Malls—Other Malls Are”
Competition from other malls is main reason for demise over past decade
By Esther Fung
April 18, 2017 7:00 a.m. ET
Internet retailing is eating into mall revenue, but competition from newer shopping centers was the most common cause of death for malls over the past decade, according to a study of 72 such properties.
While the situations were different, the dead malls generally struggled to compete with newer malls that offered more modern features and a broader selection of stores, according to Wells Fargo Securities, whose database covers about 1,000 malls.
The dead malls were built in the mid-1970s and were overtaken by larger malls built from the late 1970s to the early 1990s that better capitalized on demographic and transportation shifts.
One common hallmark of a dead or dying mall is the closure of an anchor store. When that happened, fewer customers tended to visit, resulting in more store closures, which led to even fewer shoppers, and so on.
Malls Deploy Technology to Lure—and Keep—Shoppers
Mall landlords faced with declining sales and disappearing stores are deploying smartphones, social media and other technology to lure customers—and then keep them spending.
Shopping Malls Are Tracking Your Every Move
As more shoppers tote smartphones while browsing in stores, shopping-center owners are tracking their movements and spending habits to try to figure out how best to arrange stores and mall layouts to boost shopping activity.
Lenders Tighten The Spigots on Mall Landlords
The retail malaise hasn’t stopped shopping-center landlords from getting loans—it’s just getting harder.
Greece Plus Malls Equals Risk for One Property Investor
U.S. private-equity firm Värde Partners bet on Greek commercial real estate last week when it paid €61.3 million for a stake in two of Greece’s biggest shopping malls.
Race to Revamp Shopping Malls Takes a Nasty Turn
As mall owners scramble to redevelop aging properties, they are being hamstrung by arcane agreements signed decades ago with department stores that govern how the centers are used.
Mall Landlords Lure Medical Providers As Retailers Bolt
As demand for health-care services grows, landlords are trying to attract medical practitioners to their slumping malls and strip centers. The lure: customizable space that is often close to where clients live and work.
Coming Soon to Your Local Mall: Celery and Dog Food
Mall landlords are now eagerly courting a type of retailer they once ignored: grocery stores, such as 365 by Whole Foods Market, Wegmans and Kroger.
Surprise: Outlet Malls Are Hot
Internet shopping is reshaping the retail landscape and slamming mall operators. But one corner of the industry is thriving: outlet centers.
Property Report
“Relocation of an anchor department store from the weaker property to the newer mall was a common tipping point for the downfall of the weaker mall,” said Jeffrey Donnelly, senior analyst at Wells Fargo Securities. He said weak malls are typically the fourth or fifth mall in a town with a population insufficient to support that much shopping.
The Property Report
Office Space Gets Less Costly
Retail Landlords Use Tech to Lure Shoppers
Of the 72 malls that closed, 23 were redeveloped into other types of retail property, such as strip centers or open-air shopping centers, while 18 were reused as civic centers or converted into residential towers or industrial or office campuses.
Plans for the remaining 31 malls have yet to be determined, though most of them already have been demolished. The average dead mall was about 752,000 square feet, compared with the 1.2 million square feet for an average class-A mall and the average 910,000 square feet of a class-B mall.
Ohio suffered the most mall closings—six, in Akron, Canton, Columbus, North Randall, Northwood and Toledo—followed by Texas and Missouri, with five each.
Landlords have grappled with numerous threats over the years. Two decades ago, Blockbuster was eating into the revenue of movie chains, while big-box stores were battering smaller stand-alone retailers, noted Sandler O’Neill Partners analysts in a recent report.
This time, factors such as consumers being more thoughtful about their purchases after the recession, the overbuilding of retail centers and retailers’ focus on investing in more online shopping channels are pressuring mall landlords.
Property owners generally try to court trendier brands and avoid outdated retailers. In recent years, they have started shaking up their tenant mix more radically, moving away from full-price apparel brands and toward entertainment and food offerings.
That is resulting in a more dramatic separation of the strongest and weakest malls, with top-tier malls in cities with strong population and income growth receiving more investment and weaker malls suffering from neglect.
When developers build a mall, they generally expect it to serve the community for 40 years or longer, according to the International Council of Shopping Centers. The Southdale Mall in Edina, Minn., for instance, celebrated its 60th anniversary last October. NorthPark Center in Dallas and South Coast Plaza in Costa Mesa, Calif., recently turned 50.
“Malls view themselves as community hubs, and as market shifts occur, mall owners throughout the industry have effectively curated new customer offerings to meet changing consumer behaviors and expectations,” said Tom McGee, president and chief executive officer at the ICSC.
Appeared in the Apr. 19, 2017, print edition as ‘Failed Malls Are Mostly Victims of Other Malls, Not Web.’