Malls Are Dying, but Are Strip Malls a Good Investment? (2024)

FAQs

Malls Are Dying, but Are Strip Malls a Good Investment? ›

Older strip malls might have maintenance issues or need upgrades, but even these locations can be worthy investments. Of course, the older a building is, the more likely it is that you'll need to hire a contractor to upgrade roofing, electrical wiring, or HVAC systems.

Malls are seeing an increase in traffic in 2022, with U.S. malls and outlet centers reporting an occupancy rate of 93.9% as of June 2022, up from 91.8% a year before. So far this year, 4,432 stores have announced openings compared to 1,954 closures, resulting in a net of 2,478 openings.

Shopping Center Configurations: Malls vs. Strip Centers. Malls are defined as enclosed properties with a central walkway where retail storefronts face one another. Strip centers do not include enclosed hallways.

Outdated mall model

Another factor that has contributed to the decline of shopping malls is the fact that they are becoming increasingly outdated. With the rise of newer, more modern retail spaces like outlet villages and pop-up shops, malls are starting to look a little bit old-fashioned in comparison.

Like any commercial property, shopping centers make money from two sources: lease income and sales proceeds. In a typical configuration, a shopping center is filled with retail tenants, each of whom are contractually bound by a lease agreement to pay a certain amount of rent each month.

Why shopping centers are becoming obsolete. Experts have been predicting the demise of shopping centers for a long time now, but the COVID-19 pandemic may have put the final nail in the coffin. Many mall retailers are drowning in debt as the pandemic forced them to close their doors for months – or forever.

Malls are turning into lifestyle centers, providing shopping and entertainment for post-pandemic shoppers who want to shop and play. Outlet malls are transforming themselves into destination shopping centers, versus outdated merchandise centers.

In 2020, Coresight Research projected that 25% of the country's approximately 1,000 malls would close shop in the following 3-5 years. In April, analysts at UBS projected that 40,000-50,000 American retail stores would shut down by 2027.

Najafi: The mall of the future is less retail and more content, more social and more experiential. There is an opportunity to reinvent the mall experience and bring people together in a way that encourages connection, functioning as the heart and central gathering place for the community.

For now, for better or worse, Los Angeles remains the capital of the corner strip mall.

What is the biggest strip mall in the US? ›

Chesterfield Valley is the location of Spirit of St. Louis Airport, used for corporate aviation, as well as the longest outdoor strip mall in America.

Malls are dead. At least, that was the consensus at the height of the pandemic. The shopping mall was already on shaky ground before the pandemic. A 2017 report from Credit Suisse predicted that, by 2022, between 20% and 25% percent of all U.S. malls would close.

Currently, only 1,000 malls are left in the United States. A report from Credit Suisse last year predicted that 25% of the remaining malls will be bankrupt by the end of 2022. A shuttered mall can be an eyesore for the community for many years because it takes so much money to redevelop the space.

The average lifespan of a retail mall design globally is about seven years, and probably shrinking. That means that shopping centers built before 2004 probably don't provide the amenities and shopping environment or international fashion brands younger, more affluent consumers are seeking.

Simon Property Group, Inc. is an American real estate investment trust that invests in shopping malls, outlet centers, and community/lifestyle centers. It is the largest owner of shopping malls in the United States and is headquartered in Indianapolis, Indiana.

How much profit can a kiosk business make? Annually, a successful kiosk can make about $50,000. A kiosk's success, however, is dependent on its sold items, location, and residence. Successful kiosks may decide to become permanent space occupants, capitalizing on the area's customers.

What is the disadvantage of strip shopping centers? They lack entertainment and restaurants.

Mall of America is currently the most popular and visited mall in the United States. The mall has a retail space of 5.6 million square feet.

The largest mall in the United States, the Mall of America is located in Bloomington, Minnesota only 15 minutes from downtown Minneapolis and St. Paul.

What is the problem of malls? ›

The main problems created by shopping malls include parking lot offenses (car theft, purse snatching, etc.), traffic congestion, shoplifting, check and credit card fraud, and employee theft.

A 2017 report by Credit Suisse predicted 25% of malls will go out of business by 2022 leaving millions of square feet of retail space empty. That will likely be accelerated by COVID-19.

of retail that eventually grew into more than 500 stores. All told, 1,500 malls were built in the U.S. between 1956 and 2005, and their rate of growth often outpaced that of the population. Like all booms, this one couldn't last. The decline began slowly, in the mid-2000s.

The Bottom Line: By adding restaurants and services as well as creating experiences that cannot be mimicked online, malls will ultimately be turned into places where people go to shop, eat, and be entertained – which is a main reason people shop at malls rather than ordering online.

In 2030, retailers must have an integrated omnichannel shopping experience that allows them to plan their supply based on the demand they're driving by personalizing offers, making product recommendations, and better directing customer interest.

Gray's General Store is a general store located at 4 Main Street in Adamsville, Rhode Island. Founded in 1788, it operated for almost 225 years and was reputed to be the oldest continually operating general store in the United States.

Stores will become experimental showrooms where customers can connect with brands in new ways. It will be less about making a purchase and more about experiencing the brand—touching products, seeing how they work, and then having them personalized and delivered quickly to their homes.

Physical retail stores will still be relevant

While technology will feature heavily in the future of retail, it will not replace the physical store. Customers may not purchase in-store, but real-world interactions with brands will still be highly valued.

Ft. As of 2023, the biggest mall in the world is the massive Iran Mall. Located in Northwest Tehran, Iran, this gigantic mall occupies a gross leasable area of around 21 million square feet.

California has the most with 15,285, followed by Texas's 12,834 and Florida's 10,843, according to CoStar data presented in the International Council of Shopping Center's annual State Statistics report.

What is another word for strip mall? ›

synonyms for strip mall

On this page you'll find 19 synonyms, antonyms, and words related to strip mall, such as: arcade, bazaar, flea market, mall, plaza, and shopping mall.

But some luxury shopping centers are thriving despite the retail apocalypse. Among the most successful of those shopping centers is the Bal Harbour Shops mall in Miami, Florida. Bal Harbour Shops sits in a high-end beach destination and has attracted affluent shoppers since it first opened its doors in 1965.

Sawgrass Mills, Florida

With a massive 350 stores to explore, Sawgrass Mills is the largest outlet, retail and entertainment destination in the United States. Stores include Coach, Gucci, Jimmy Choo, Michael Kors, Polo Ralph Lauren and Prada. One of the highlights of Sawgrass Mills is the life-size Barbie House.

Originally opened in 1828, the Arcade Providence made history as America's first enclosed shopping mall. And the building's grand exterior and architectural details — including Greek Revival columns and granite steps and walls — quickly became a defining element of Providence's downtown architectural aesthetic.

Southdale Shopping Center, located in Edina, Minnesota, was the first totally enclosed shopping center in the nation.

Southdale Center is a shopping mall located in Edina, Minnesota, a suburb of the Twin Cities. It opened in 1956 and is both the first and the oldest fully enclosed, climate-controlled shopping mall in the United States.

To conclude, there are so many benefits of shopping in large malls such as discounts on items, premium quality products, all kinds of items under one roof, etc which are attracting people to come there.

Now, over two years later, business analysts report a resurgence of brick-and-mortar retail. Lockdown and social distancing resulted in pent-up demand for the in-person shopping and dining experience. In fact: According to research from Forrester, 72 percent of U.S. retail sales will still happen in-store by 2024.

The shopping mall hit its prime in the '80s, and its social significance remained just as present all throughout the '90s and early '2000s as teen mall culture thrived.

As of 2021, there are approximately 1,100 shopping malls in the United States.

Are malls bad for the environment? ›

One of the most common pollutants in shopping malls is carbon dioxide (CO2). Since CO2 comes from exhaled air, it can start to accumulate in crowded malls with poor ventilation or air distribution.

Malls are seeing an increase in traffic in 2022, with U.S. malls and outlet centers reporting an occupancy rate of 93.9% as of June 2022, up from 91.8% a year before. So far this year, 4,432 stores have announced openings compared to 1,954 closures, resulting in a net of 2,478 openings.

Research also shows that whereas the average spend per consumer in a common or garden mall is approximately $78, in a luxury mall that figure rises to $842 dollars.

Narrator: In the 1980s began the mall's golden age.

If you invest in the right location, attract the right businesses, and are responsive to issues with the property as they arise, a strip mall can be a successful and consistently profitable addition to your commercial real estate portfolio.

These areas are particularly convenient for big-box retailers like Lowe's and Walmart, which need expansive land plots to build their large stores. Other retailers might find advantages in strip malls' proximity to traffic and neighboring businesses.

Shopping Center Configurations: Malls vs. Strip Centers. Malls are defined as enclosed properties with a central walkway where retail storefronts face one another. Strip centers do not include enclosed hallways.

The most popular products for these types of kiosks and carts are familiar staples: popcorn, peanuts, ice cream, hot dogs, pretzels, and gourmet donuts or coffee. With the fresh aroma of the tasty treats wafting through high-traffic areas, customers have a hard time walking past your kiosk without stopping for a treat.

What are the pros and cons of opening a mall store? ›

Malls attract many customers, offer many types of stores, have a comfortable environment to shop and have consistent store hours. Some of the disadvantages are: occupancy costs are high; mall owners control business operations such as display advertising; competition is intense.

Why would Save-A-Lot grocery store choose to be located in the same strip mall as Dollar General and Walmart? Save-A-Lot targets price-sensitive consumers as does Dollar General and Wal-Mart. Although these stores share the same target market, they offer different non-competing merchandise.

The cons of operating in a mall retail space

Must follow operating days and hours, including holidays, with those of the entire mall. Higher rent costs, especially in larger, well-maintained and popular malls.

With six major department stores and more than 450 stores, boutiques and restaurants, the King of Prussia Mall is the third-largest mall in America. The attraction's 2.9 million square feet of retail space welcomes an astounding 22 million visitors a year.

Mall of America

Located in Minnesota, the Mall of America is one of the most visited malls in the United States. The mall attracts more than 40 million visitors, making it a more popular attraction than Magic Kingdom and Walt Disney World. With 520 stores and 50 restaurants, this mall has multiple options.

It's unlikely that shopping malls will become obsolete. While the rise of online shopping has had an impact on mall traffic, malls are still popular places to shop, and many people enjoy the experience of going to the mall.

2.3 Factors that contribute to the shopping mall success

Among the factors that contribute to the shopping centre success are strategic location, good shopping centre design and layout, wide ranging tenant mix, sufficient parking space and efficient promotion and marketing strategy.

As of today, there are 116,000 shopping centers in the country. At the same time, the number of vast and iconic objects has decreased from 2,500 in the 80s of last century to 700 at present.

When was the last mall built in the US? ›

The Mall at Turtle Creek in Jonesboro, Ark., on March 29, 2006, was considered to be the last truly enclosed mall constructed, according to the ICSC, and was the only enclosed mall to open in the country that year.

The massive change led Newsweek to declare the indoor mall format obsolete in 2008. The year 2007 marked the first time since the 1950s that no new malls were built in the United States.

Most of the larger grocery store chains do enormous volumes of business, so they tend to restock every day. Since smaller grocery stores don't turn their inventory over as frequently, they often restock twice a week—usually on Tuesdays and Fridays.

Shoppers still like stores. A positive in-store experience is critical to repeat business. That's one of the findings of a study from Raydiant, in which 48% of respondents said they prefer to shop in-person at a physical store when given the choice.

Have you ever been to The Mall at University Town Center (UTC) in Sarasota, Florida? If not, you might be missing out on a piece of history, because, by most accounts, it just might have been the last new-build enclosed mall constructed in America.

Mall of America is currently the most popular and visited mall in the United States. The mall has a retail space of 5.6 million square feet.

In early 2020, Mall of America closed for a period of twelve weeks in response to the COVID-19 pandemic, closing on March 17, and reopening on June 10 with only 150 tenants open for business.

The cheapest day to shop for groceries

While specific days of the week are best for saving on specific items, the best overall shopping days are Wednesday and Thursday. Bread and beer are typically marked down on Wednesdays, and snacks are often cheapest on Thursdays, according to shopping experts.

The standard for hotels, supermarkets, construction companies, and similar medium sized applications is around 30 to 90 days. For larger enterprises, it is often recommended to store footage for 3 months.

What is the busiest shopping week? ›