These days there are many transitions taking place in American life, and one of the most visible is the so-called “death of the shopping mall”.
American consumers are changing their habits in a variety of ways. Among those is the growing impact of online shopping, which has reduced local retail traffic. Combine that with the housing market melt-down which led to widespread small business failures in 2008 and 2009, which in turn led to high vacancy rates for retail properties. As a result, many shopping malls have found themselves slowly dying as their customer base heads in another direction.
This is not a new phenomenon, it’s been going on for quite some time. There is even a website that keeps up with the “official” list of dead or dying malls. It’s appropriately titled deadmalls.com
Some of these malls are simply pretty old, and the areas around them have changed drastically since they were originally built in the 1950′s or 60′s. Some are newer. Many such retail facilities were built during the housing boom years. Quite a few have ended up in foreclosure because of mismanagement and the irrational exuberance of the boom years. Some of them, originally built on wetlands, before wetlands laws were passed, have actually been returned to their original natural state as a wetland, with the old mall permanently removed. And some have been made into parks or integrated into other adjacent shopping or park areas.
I think that this is one of the more interesting and unique opportunities for real estate investors to “give back” and demonstrate constructive creativity by partnering with local governments and communities to bring these “dead” malls back to life. But this time, instead of “paving paradise and putting up a parking lot” as Joni Mitchell lamented in the 1960′s hit “Big Yellow Taxi“, we’ve got a golden opportunity to recreate these malls and turn them into facilities that can better benefit the communities in which they are located.
The New York Times weighed in a while back with this interesting article that details several projects to repurpose old shopping malls. The projects include ideas for addressing specific community needs. Classroom space is an ideal use. Another would be senior related services.
Seniors like to congregate at covered shopping malls in order to have a safe place to walk. Perhaps living in an enclosed mall that has been retrofitted as a combination senior center, senior housing, and senior support services such as food and medical facilities could all be included under one roof. There is no other property quite like a covered shopping mall. It would be theoretically possible to put all necessary, basic senior services under one roof, including even government related services like the local social security office.
As technology and the internet continue to change the face of everyday life, having the opportunity to preserve and repurpose our older shopping centers and enclosed malls represents a rare opportunity for real estate investors and developers to create projects that support the community. This is not something that the commercial real estate industry is not known for. But it is one of those rare times in history when a the changing times have allowed for a unique opportunity to improve everyday life for those groups that could benefit from the same kind of innovative thinking that created shopping malls some 60 years ago.
Donna S. Robinson is a real estate investor, author and speaker located in Atlanta, GA. Follow her on twitter at donnaconsults. Her book “Basics of Real Estate Investing” is now available on Amazon.com for the Kindle.