The shopping mall is getting a big makeover across the country. Faced with a shrinking number of shoppers, mall landlords are looking to reinvent shopping centers, mixing in everything from apartments to concerts, to get more foot traffic.
One giant in the mall space, Westfield Corp., has cut its portfolio of shopping centers in half from 66 to 33 since 2004. It’s now testing the waters in apartment buildings, organizing concerts and other events, to engage consumers in a new way inside of a mall.
“In the past, mall landlords could rely on their tenants to drive traffic to their centers," Romney Jacob, president at consulting company Threadsight, told The Wall Street Journal. Landlords now realize they must provide something different than just a line of stores.
Indeed,
Steven Lowy, co-chief executive with Westfield Corp., told investors in October: "We are evolving and are continuing to evolve from a company that was really in the business of building buildings and leasing shops to retailers, to creating a much broader strategy."
At Westfield UTC mall in San Diego, the company has spent $585 million to make over the property by adding dining spaces, an 18,000-square-foot event facility, a public transit center, office space, and 200,000 square feet of new retail stores. It also plans to construct a 300-unit luxury rental apartment building, which will have its own curb access separate from the shopping area.
Adding apartments near shopping centers is catching on as more Americans show demand for living near retail. For example, in the Washington, D.C., metro area, Macerich Co. teamed with a multifamily developer to build a 30-story apartment building, Vita Apartments, where residents score discounts by shopping at the adjacent Tysons Corner Center mall. That mall also has a 22-story office tower and a Hyatt Regency hotel.
Source: “Mall Landlords’ Next Act: Apartments and Concerts,” The Wall Street Journal (Feb. 21, 2017) [Log-in required.]
