Report: Regional malls on the upswing since 2010

Scads of national retail chains are seeing their concepts fade out, but regional malls are still firmly in the picture.



That’s the diagnosis put forth in a report titled “Why Mall Reuse is Just Beginning,” from the entrepreneur-driven real estate firm Transwestern. Some key data points include:

*Regional malls have had positive net absorption since 2010, with the only blip in absorption occurring in 2009, at the height of the recession.

*In 2016, the U.S. retail market experienced 105 million sq. ft. of net absorption, representing a growth in occupancy of around 1%.

*Mall occupancy across the U.S. was above 95% in December 2016, equating to 848 million sq. ft. of space.

*Mall productivity has remained relatively steady and rose 0.7% in the last year to $465 per square foot.



“While we’ve seen store closures increase in 2017, malls are, for the most part, attracting new tenants through strategic marketing and property enhancements,” said Nick Hernandez, managing director of retail at Transwestern. “And in cases where a retail mall no longer makes sense, we have seen many owners successfully adapt to the changes in their trade areas by repurposing the mall for another use.”



The bottom line, as most developers are eager to point out, is that malls occupy some of the most accessible, highly trafficked real estate in the land, and it’s not about to go fallow. Using market data analysis and re-seeding properties with office space, residences, and medical facilities “are allowing the regional mall that took off in the 1950s to evolve into a new type of gathering place,” said Transwestern’s Brian Landes, author of the report.