NewsPour 8.11.23

News roundup of top recent weekly stories involve a special report on the death and rebirth of shopping malls.

Death of the Shopping Mall

Changes in shopping and closures in department stores are driving the demise of the traditional mall. Shopping malls, including newer well located properties are worth less than 50% and for older properties sometimes less than 70% of late 2016 valuations according to research firm Green Street. About 20% of malls with CMBS loans are underwater and worth less than the debt and at risk of defaulting. Watch our discussion in our YouTube video here.

Rebirth of the Shopping Mall

Mixed use is the new model for the modern shopping mall. Such centers may have hotels, condos, offices, healthcare and entertainment experiences mixed in with retail shops. Flexibility and convenience is prioritized. There has been a shift from transactional shopping to a relational experience that cannot be replicated with online e-commerce. Watch our discussion on our YouTube video here.

Shape of Shopping Mall Conversions

Many old malls are converting to residential mixed-use properties with local retail shops. In JLL’s analysis of 135 mall redevelopment projects over half involved housing. Older shopping malls are often located in areas ideal for residential development. With strong demand for housing and traditional shopping malls struggling the trend is likely to continue. However the shift to residential often includes a retail component with smaller local stores, such as Macy’s new shops focused on strip malls. Watch our discussion on our YouTube video here.