Reports of the death of the shopping mall have been greatly exaggerated….though it depends on the mall.
Sure, “ghost malls” are real. Usually small town malls where occupancy has dipped low enough that very few opt to shop there anymore. “I think you’ll see a lot of malls continue to close,” says Brian Sozzi of Belus Capital Advisors. “The fundamentals of shopping are changing drastically.”
That, however doesn’t mean America hates malls and has given up on them completely. “What you’re seeing is Simon property (SPG), Vornado (VNO), Macerich (MAC), they’re all investing in redeveloping the mall and creating the mall of the future.”
Sozzi says the reinvention starts in the food court. “You’re getting sit down dining destination within the malls. It gets people into the mall that otherwise would not have gone.”
The changes won’t end there he says. Malls instead will find new uses for empty space to make them community centers once again and places people want to spend more time in.
“Once Sears (SHLD) goes out of business...that massive structure become reclaimed by the community. I think you’ll see health clinics go in there, you’ll see new gyms,” Sozzi says, adding that Planet Fitness is already heading into malls and that store closings from Macy’s (M) and JC Penney (JCP) will add to the space available for new kinds of businesses.
So what about those small town malls no one goes to anymore? Will they too get re-imagined? Probably not. “Ghost malls are done. Those are getting bulldozed and you’ll get retirement homes” to satisfy the growing baby boomer population.
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