Malls reinventing themselves as mixed-use centers are finding that the conversions bring them higher rents for residential and office space—as well as retail.
Real estate intelligence provider CoStar recently surveyed 37 U.S. malls that had redeveloped their properties or were planning to do so and found that apartments in their reimagined lots merited rents 13.9% higher than similar spaces within the same market.
Office space on re-made mall sites rented at an 8.6% premium and retail rent rose by 7.3%.
“Multifamily has been more in favor by investors over the past few years than office, so this goes to show that multifamily and retail complement each other quite well,” said CoStar analyst Robin Trantham.
Of the 37 properties in the study—which were A, B, and C malls—86% had added or were adding multifamily housing, 65% hotels, and 51% hotels.