Beginning in the late 1980s and through the 1990s, the American mall was an engine of commerce and center of community life. People gathered there for dining, fitness, health services, events like concerts and book signings, and also actual shopping. But, even as the malls we now know are slowly dying, a new iteration of these commercial spaces is geared to reflect the best of what was: a space that provides more than goods and transactions.
According to a focused unit of financial services giant TIAA, roughly 50 percent of all existing retail real estate could be repurposed or demolished. This isn’t just illustrated by the heap of dirt piled high in the location formerly known as Crestwood Court mall – it’s a situation that cities across the nation are facing.
This south St. Louis County location is certainly a site developers have been looking to repurpose, but recent reports show that St. Louis isn’t alone in its retail redevelopment opportunities. Chicago, Pittsburgh, Detroit, Atlanta and Dallas-Fort Worth all have more than 8 million square feet of low-quality mall stock that could present a similar opportunity. This may sound like dire news for the industry, but it opens the door for a reimagining of retail.
While traditional malls once relied upon big-box department stores to drive foot traffic, new retail offerings are often integrated into open-air shopping centers with a diverse set of tenants. In addition to stores, these developments include more restaurants, entertainment venues and experiential retail concepts.
Locally, this approach is evident at The Meadows at Lake Saint Louis, The Boulevard in Brentwood and even St. Louis Union Station. The latter currently features a hotel, a few restaurants and a train park, as well as seasonal offerings through The Polar Express holiday rides. However, plans are in the works for an aquarium, more recreational options, added dining concepts and interactive shows.
The primary goal will be creating a space that entices consumers away from online shopping outlets and back into a setting that engages them in community. People must be lured off of their couch, out of their pajamas, and back out into a space that offers more. A key example of this can be found within the City Foundry development in midtown St. Louis. Here, the Lawrence Group has secured an Alamo Drafthouse movie theater, a German-inspired beer hall, and a Punch Bowl social gaming and dining experience. While the original setting is the former Century Electric Foundry complex rather than a traditional retail footprint, the 15-acre property is modeling an environment that malls can use as a pattern for their own revitalization.
Creating these first-to-market concepts – especially on an exclusive regional basis – is essential for developers looking to sustain consumer interest and business success. Developers looking to fill space or repurpose dead retail should consider bolder choices that show flexibility and creativity in terms of leasing.
Food halls that offer artisan-made products, food-oriented boutiques, butcher shops and interactive elements, for instance, are predicted to more than double in the U.S. in the next 5-10 years, according to a Forbes report. By the end of 2020, analysts predict there will be 300 food halls across the country.
New short-term leasing options are also becoming available, as businesses such as Appear Here and Uppercase are matching tenants with retail spaces on a pop-up basis. This gives developers the opportunity to keep product fresh, relevant and exclusive with limited-edition offerings, product launches, marketing activations and buzzworthy brand collaborations.
As retail space integrates with mixed-use philosophies, the chance for differentiation arises through non-traditional anchors. New mall anchors now include discount stores, niche boutiques, apartments, hotels, classrooms and fitness spaces. Experiential shopping, such as what’s offered at Riley Rose, is tapping into consumer trends in a new way, and could drive traffic that online shopping can’t beat.
Throughout this retail revolution, Intelica Commercial Real Estate will be monitoring not only the opportunities available within the St. Louis marketplace, but also the trends that are driving retail success and revitalization across the country. Contact one of our experienced real estate professionals to learn more about shopping demographics and developments, and how they can impact your portfolio.