Mall owner leased more space in 2021 than it did in the previous five years

If malls are dying, why are so many new tenants taking space in them?

PREIT, an owner of regional and super-regional malls in the eastern half of the United States, reported that it had executed transactions for 1.2 million sq. ft. of space in 2021. That’s its highest leasing total of GLA in five years and nearly three times as much as it leased in 2019, according to an assessment from the Philadelphia-based company.

Several of the new tenants were first-to-market or first-to-regional-malls, such as the new Aldi supermarket at Dartmouth Mall in Dartmouth, Mass. Other new tenants signed by PREIT last year included Peloton and Purple at Cherry Hill Mall and Power Warehouse at Cumberland Mall in New Jersey, as well as Rose & Remington and Offline by Aerie at Woodland Mall in Michigan.

PREIT noted that eight million customers visited PREIT malls in November and December 2021, a 25% increase over 2020, and that sales per sq. ft. hit across its portfolio hit a record $590 in November.  

The company stated its intent to sell more than 10 land and operating parcels at its mall properties for an estimated $120 million this year, $40 million of which will be acquired by multifamily housing developers. PREIT recently received approval to begin construction of a residential development at its Moorestown Mall in suburban Philadelphia.

"Raising capital is a key strategic priority to further strengthen PREIT's financial flexibility,” said CEO Joseph Coradino. “We have several significant capital-raising initiatives in advanced stages of implementation and will continue to reduce our overall debt and interest obligations.”