I have a theory. If you watch a lot of television on a real television, you probably also spend a lot of time in shopping malls.
Why do I believe that? There are a few reasons. It’s likely older, so you don’t watch your video entertainment on your phone, or just use your TV as a conveniently large screen to stream the Netflix show of your choice via Chromecast, Fire Stick, or Roku.
Being older, you probably also haven’t migrated as much of your business to the online world as millennials and “post-millennials” (in other words, teens) have. However, you are likely catching up quickly in this area.
Finally, although this correlation is not as close as the others, being higher means that you probably have more disposable income than young people who must pay off student loans while they are on the lower rungs of the career ladder. All of these factors make it an ideal candidate for spending time in so-called “A ++” shopping centers.
The A ++ rating comes from Green Street Advisors, a real estate research firm, and only three dozen shopping malls do so nationwide. (1) These malls include some of my favorites, like the Lenox Square Mall in Atlanta and the Westfield Century City Mall in Los Angeles. The Westchester, a New York County mall of the same name, is also a likely member of the mostly private list, due to its high sales performance.
You don’t visit places like these to save a few bucks on a new pair of shoes, just as you don’t go to the local multiplex to secure the best possible movie deal. These are destinations. You go because you can do some things that you enjoy, or maybe things that you can tolerate while your partner enjoys them, in a relatively pleasant environment.
The bifurcation of the commercial economy reflects the bifurcation of the real economy. A small part of the population with a large amount of disposable income can afford to spend a part of that income on pleasure. A much larger group, who need to stretch their money as much as possible, have an expanding and much more efficient set of options for finding value on the Internet. And when saving money is a priority, wealthy people can and do use those options too.
Unlike some, I don’t think this fork is necessarily a bad thing. For most households, it is important to get the most out of every dollar. Not having to pay the overheads that come with even a decently maintained mall provides significant savings, not to mention the convenience of expanded inventory and home delivery. That is why the total number of shopping malls in this country is shrinking, even as the select few at the top are renovating and expanding.
However, whether the economic fork is good or not, it provides a clear explanation of what is happening in American malls. Conventional wisdom holds that malls are dying, and for lower-tier malls, that perception is true. Green Street Advisors estimates that about 15 percent of existing shopping centers in the US will close within the next decade. (2) And new shopping malls are rare; only six have opened since 2006. (1)
It is an open question how these old dead and dying shopping malls will be reused in the future. Since many of them are busy, high-traffic places near traffic arteries, they may one day make good workspaces, hotels, convention centers, or mixed-use projects that include residential developments. We’ll have to wait and see.
In contrast, the owners of the most successful shopping centers have not hesitated to spend large sums in order to stay fashionable. Westfield Corp. is giving Century City an $ 800 million facelift. Simon Property Group, the nation’s largest shopping center owner by market capitalization, has said it plans to remodel or expand 29 of its properties here and in Europe. That optimism is also not unfounded. Simon’s stock prices hit an all-time high last October, Bloomberg reported. (1)
The high-end shopping malls that survive will likely look much more like the urban centers of today, just as the old malls reflected the malls of yesteryear. Urban centers were once primarily shopping destinations, until shoppers headed to suburban malls. Today’s urban centers have been largely revitalized as entertainment and dining destinations, often targeting those with the ability and inclination to spend on high-end experiences. Building on the trajectory of existing top-tier shopping malls, those that survive will likely evolve in the same way, focusing on luxury stores alongside popular chain restaurants, high-end services like lounges, and entertainment options as the latest. in technology. art movie theaters.
The 25-year-old malls, a collection of stores geared primarily to middle-class shoppers anchored by department stores like JC Penny or Sears, are disappearing. But if you want a place to go to handle the latest I-gadget, where you can then walk a few steps to order a mochaccino, there will likely be a mall for you for quite some time.
Sources:
1) Bloomberg, “These malls did not get the note that they are dying.”
2) The Wall Street Journal, “Exclusive Mall Owners Pay to Stay Stylish”