With mall vacancies at a rapid clip with a boom in online shopping, homeowners are quickly looking for other ways to reuse the glare of empty stores that will help boost traffic to shopping centers.
According to data from research firm (REIS) Moody’s Analytics, the mall vacancy rate is at a historic high of 9.8% at the beginning of September, higher than the previous peak of 9.3% in 2011.
“I think the rate will continue upward over the next five years,” said Victor Calanog, head of commercial real estate economics with Moody’s Analytics.
“The coronovirus crisis boosted the long-haul of e-commerce into high gear,” Calnog said. “As we begin to recover from the epidemic, it is highly unlikely that the vacancy trend will return to pre-Kovid-19 levels,” he said.
The stakes are high for mall developers, who are now remodeling the spaces in various ways.
Store out. Doctor’s office.
In this environment, there may be a possibility of a backfire at a closed shop space with another store.
Alternatively, mall developers say they are scouting for businesses other than retail outlets to have short and long-term storage facilities for both doctors’ offices and residential and commercial customers from schools.
“Pre-Kovids were about to inspect retail space across the US,” said Ami Zeif, director of national retail for Time Equities, which owns and manages hundreds of retail properties across the United States, including the attached mall, free -Permanent Store and Open Air Mall.
He said, “Now the supply of available space is increasing and the demand for retailer is quite soft. So you have to be agile and creative about who to take it to and get out there and work with a different type of tenant. . ”
One of its properties – Landing in Columbus, Georgia – said Ziff said the company is signing leases with local retailers and restaurants, but noted that at the time the equity portfolio signed leases to doctors and dentist offices Has increased.
The Landing is a complex of three shopping centers in Columbus, about 300,000 square feet of open-air retail in Georgia.
And at his indoor mall in Maryland, Tennessee, Ziff said an empty JCPenney store is also drawing a lot of interest from non-retail businesses, including a tenant in the healthcare sector.
“As mall operators, we can’t just sit on our hands and wait for people to come to us. We have to go there and sell these ideas because the supply right now is greatly increasing the demand for space . ”
Wanted: Micro Warehouse
The popularity of online shopping and same-day delivery has fueled demand for spaces to serve as last-mile delivery fulfillment centers.
Ziff said retailers, including direct-to-consumer vendors, are racing to find empty spaces close to their consumers in urban areas to speed up delivery of orders.
“Empty shops in malls can be turned into these micro fulfillment centers,” he said.
It is a smart idea to use vacant mall space for stock inventories, said Avionos co-founder Dan Nivem, who provides digital commerce expertise to companies.
“Retailers are struggling to become super local so they can deliver to their customers more quickly,” Nivem said. Empty stores in the mall are already located near customers and they have infrastructure.
He said that retailers can place orders not only for shipping centers to set up micro warehouses, but because shoppers are already coming to the mall, they can order shoppers on the spot and pick up from the warehouse Huh.
“It’s about using the concept in many ways,” he said.
Sears gave up. I am running a high school
Brookfield Properties, a subsidiary of Brookfield Property Partners and the nation’s second largest mall operator, is bringing a school to one of its malls.
A former 70,000-square-foot eraser store at its Grand Teton Mall in Idaho Falls, Idaho is being renovated as a charter school to open in the fall of 2021.
A portion of the mall’s parking will be converted into an outdoor play and recreation area for students.
Michelle Ball, executive director of the Alturus International Academy School in Grand Teton Mall, said about 600 students from the 6th to 12th grades would attend.
“We wanted to start adding a high school but we couldn’t build a new one,” Ball said. “The option to take this big box space that used to be a Sears store and get us excited to renovate it.”
He said that to maintain security, he said that any entry into the renovated space through the mall would be closed.
Ball said the location of the new school is a win-win because “we’re here to support the community that needs a high school and the mall’s businesses can get more traffic because of it,” she said.
Once completed, the school in Grand Teton Mall will not be the only mall school in the area. Gem Prep Pocatello, another charter school about an hour from Grand Teton Mall, opened last year at a former Sears store at Pine Ridge Mall in Chubbach, Idaho.
The deal for Alturus School was set in pre-pandemic, said Jeffrey Aronoff, senior vice president of leasing with Brookfield Properties.
He said Brookfield is exploring bringing other tenants such as self-storage services, and indoor sports facilities such as football fields to its malls.