25% of shopping malls to close within 5 years
- Traditional mall anchors Macy’s, J.C. Penney and Sears announced widespread closings;
- Niche retailers American Apparel and BCBG Max Azria have filed for bankruptcy;
- 8,640 stores will close by the end of the year.
Key Driver? Shoppers’ habits continually shifting from in-store to online buying.
THE RUB: Ripple effect of the closing of mall anchors – once a department store goes vacant, middle retailers like nail salons and jewelry stores suffer from lack of traffic from the larger stores.
Brian Andrus, president of the Florida Gulfcoast Commercial Association of Realtors (FGCAR), says the problem is even worse in retail-intensive areas. He urges property owners and municipalities to not be caught asleep at the wheel.
“We’re being confronted with a fundamental change in people’s shopping habits.” – Andrus
Per Andrus, the best approach is to engage in creative repurposing. He predicts that malls will morph from purely shopping venues to destination sites with more entertainment value, i.e.:
Grapevine Mills, located two miles from Dallas/Fort Worth Airport, has 200+ retail outlets but now offers a Sea Life aquarium, a Legoland and an amusement center featuring 24 lanes of bowling, billiards, video games and karaoke.
His solution? Developers, entrepreneurs and municipalities should engage with talent inherent in the commercial real estate professional community – or risk the inevitable shuttered stores and vacant buildings, resulting in the decline of the physical asset’s value as well as that of property values.