For malls looking to reinvent themselves, experiences matter. Malls offering movie theaters, gyms, arcades, and better dining options are finding more success.
Yet mall developers dismiss talk of their demise despite today’s retail industry travails.
“I will tell you, it’s not a very fun environment,” David Simon, chief executive of the real estate investment trust Simon Property Group, said recently about finding new takers for vacated real estate.
“We’re pounding the pavement more than ever,” he said in a conference call.
Simon said he has been encouraged, however, by a trend of e-commerce chains like apparel maker Eloquii or eyeglasses seller Warby Parker raising capital to open brick-and-mortar stores. Some of these newer brands could ultimately have as many as 400 stores, he said.
“In this cluttered world of trying to get people focused, we are seeing more and more brands that want to gravitate to where the traffic is,” Simon said. “By and large, in communities throughout the country, that’s the mall. And that has not changed.”
GGP, another real estate investment trust, plans $1.5 billion in mall investment, including a greenfield mall in Norwalk, Connecticut and a major expansion to the Staten Island Mall in New York City that it bills as a “shopping center of the future.”
Staten Island will add the German supermarket chain Lidl, as well as Dave & Buster’s, a new AMC movie theater and a few new apparel stores.
GGP has also budgeted “refresh capital” for existing malls — sometimes stretching into the millions of dollars. The company recently removed an old fountain and spiffed up the dining area at its Wayne, New Jersey mall.
“You’ve turned your old, very tired looking food area into something very modern,” Kevin Berry, a vice president at GGP, said of the Wayne upgrade.
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