The Beauty of B-Market Malls
Did you know that one of the nation’s largest and most successful malls resides not in Miami, not in Chicago, not in Dallas, but in Niles, Ohio?
Cafaro’s Eastwood Mall in Niles, Ohio, outside of Youngstown, has 3.3 million sq. ft. of GLA (2 million of that open-air), draws more than 15 million visitors a year, and features a 6,000-seat baseball stadium that’s the home of the Major League Baseball Draft League’s Mahoning Valley Scrappers.
No doubt you’ve read in the business press that malls in socalled “B” and “C” markets are either closing or on the endangered list. That theory misses some key dynamics. Mall operators who operate in the middle markets, such as our company, closely monitor consumer trends and maintain close relationships with local municipal officials. We have the opportunity to not just be the only show in town, but the star shopping, dining, and entertainment destination in the county.
Being a privately owned company, Cafaro has an advantage over REITs and publicly traded mall operators such as CBL and Macerich. It’s easier for us to innovate because we’re able to take the long view with our tenant curations. We don’t need to focus on the next quarter or the current year. We’re able to plan where we are going to be five or 10 years from now.
In 2023, we opened a 160,000-sq.-ft. Meijer and a 63,000-sq.-ft. Bass Pro Shop at Eastwood Mall. Tenants such as these instantly widen our trade area. We’re not just the mall for Niles, but for a tri-county area in two states. Eastwood now attracts customers liv[1]ing within a 45-minute driving time. My shareholders are my family, and we discuss deals like these sitting around the dinner table.
We’ve never been constrained by what a mall could be, and we don’t believe in cookie-cutter tenant curations. We operate 40- plus centers and no two are exactly alike. We signed Target as an anchor at some of our malls in the 1980s and ‘90s and people in our industry told us it would downgrade our properties. Now those naysayers would be singing hosannas if they landed a Target in their properties.
In 2003, Cafaro signed Costco as one of the anchors of its Spotsylvania Town Centre in Fredericksburg, Va., and a business associate asked me, “Why would you do that? You should get a Lord & Taylor instead.”
That Costco averages $250 million a year in revenue. And that Lord & Taylor would have closed.
Our first residential development of 271 luxury apartments recently debuted at Spotsylvania, a location that has a very different dynamic than most of our other centers. It is located off an exit from I-95 and draws significant traffic. Tenants have access to plush amenities in that center and it has been received very well.
Yes, we use analytics like Placer.ai data to analyze the traffic in our malls, but we’re more old school because we have the opportunity to be. In B markets, it’s easier to mix with the customer base to keep track of their current needs and wants. We’re not focused on just the 20-to-40-year-old segment of consumers. We consider the desires of their parents and grandparents, too. Our staffs engage with them on an ongoing basis and interact with local Chambers of Commerce and town officials to read the pulse of individual communities.
In major metros, malls are no longer considered the place to be. Centers in big cities have to compete fiercely for people’s time. It’s not like that, however, in Clarksville, Tenn., or Erie, Penn., or Paducah, Ky.
This year, Cafaro Company is celebrating its 75th Anniversary. Certainly the industry has changed since our founding. Nobody’s building a million-square-foot mall anymore, and that’s okay. We’re continually evolving to make our centers succeed. We love being the unicorn.