Much is being written about the demise of the American mall. Is it really dead? Cooper Carry's retail designers took a look at the state of the mall and have some declarations to make.

1. Is the mall really
DEAD?

2. Since 2010, more than two dozen enclosed
shopping malls have closed.
Source: Green Street Advisors

3. But why?

4. Some say demographics
and changing shopping
habits have led to the
mall’s demise

5. Some say ECOMMERCE is to blame

6. REALITYIS THAT LESS
THAN 10% OF GOODS ARE SOLD
VIA ONLINE RETAILERS
Source: New York Times Jan 3, 2015

7. Online purchases
affect Big Box
retailers more.
These stores are
generally not in
malls.

8. Malls are more affected by BEING overly
saturated with too many of the same stores.

9. Conclusion?
A glut
of retail
is one cause
for mall
failures.
A pie can only be sliced so much!

10. Or the mall simply failed to ADJUST
to the changing market

11. So what’s happening?
How does one go….
FROM THIS To THIS>>>

12. Some malls have declined due to the
consolidation of anchor tenants

13. IN 1990, ANCHORS LIKE RICH’S,
BLOOMINGDALES, MARSHALL FIELDS,
HUDSON'S, DAYTON'S AND MACY’S
WOULD FIGHT OVER SPACE IN MALLS.
Some malls have declined due to the
consolidation of anchor tenants

14. That’s not the case today.
Macy’s BOUGHTthem all!
Bloomingdales
Marshall FieldsHudson's
Dayton's
Rich’s

15. ?So what’s the bottom line

16. Not all MALLS are dead
and NOT ALL malls are going away

17. Malls have never been
entirely about BUYING

18. The first mall in the US was not created
by a merchant, but by a sociologist!
Victor Gruen understood the need to create a
centralized community to battle the American
suburb of cul-de-sacs, clubs and carpools.
Victor Gruen understood the need to create a centralized community
to battle the American suburb of cul-de-sacs, clubs and carpools

19. People want to be with other people….
Gruen understood this basic need
and he created a way for that to be
possible…..20th century-style

20. People have been coming together to
formally socialize since at least the
10th Century B.C..

21. The Census Bureau estimates there will
be more than 88 million people over 65
in America by 2050, more than twice
the current figure.
That alone gives modern malls a
core customer base.
another reason…

22. That’s a lot of mall walkers!

23. Just one more reason….
According to data released by the
International Council of Shopping Centers,
occupancy rates increased, the highest
since the throes of the recession,
in second-quarter 2008.

24. End of 2014,
mall occupancy UP
sales per sq ft UP
The BEST since 1987
Source: Retailing Today

25. This is worth repeating….
End of 2014,
mall occupancy was 94.2% -
The BEST since 1987
Source: Retailing Today

26. Like malls, there’s lots of
office buildings….

27. Let’s compare Mall OCCUPANCY
to office buildings –
end of 2014
Office occupancy
83.2%
Mall occupancy
94.2%
Both are types of real estate

28. WE DON’T HEAR PEOPLE
SHOUTINGTHAT OFFICE
BUILDINGS ARE DEAD!

29. Only 3.4% of all malls
are considered “dead”
40% OR MORE VACANT
(CONSIDERED DYING)
20% - 40% VACANT
(CONSIDERED UNHEALTHY)
10% TO 20% VACANT
(CONSIDERED A SIGN OF
TROUBLE)
20%
15%
10%
5%
0%
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14
Source: New York Times Jan 3, 2015

30. CONSIDER THIS….
If 3.4% of all malls are dead,
96.6% ARE
NOT!

31. 80% OF THE 1,200 US MALLS ARE
CONSIDERED TO BE HEALTHY.
Many malls have vacancies under 10%
Source: CoStar

32. People are spending & most
mall rents are on the rise…..
As much as 17%

33. What about Net Operating Income?
2014 Mall NOI was the HIGHEST
year over year growth in 14 years!

34. Sales to increase 5% Earnings to top 8%
Wall Street Predicts mall owners will see…

35. Some malls have seen their market
change so quickly and drastically,
they will change
Or die a quick death….

36. Fledgling malls must reposition
themselves to survive

37. Repositioning of
Phipps Plaza, Atlanta, GA
Others will
have to refine
themselves
to meet the
changing
market

38. “All malls can die without
sensitivity to change “
-Gar Muse
Principal, Retail Design
COOPER CARRY

39. repositionverb re·po·si·tion ˌrē-pə-ˈzi-shən
> to change the position of
> to revise the marketing strategy for
(a product or a company) so as to
increase sales
RE

40. It seems like much of the mall
repositioning is taking place in dense
urban environments

41. Take Landmark Mall near Washington, DC
for example
It seems like much of the mall
repositioning is taking place in dense
urban environments

42. Take Landmark Mall near Washington, DC
for example
Landmark Mall is ADAPTING
It seems like much of the mall
repositioning is taking place in dense
urban environments

43. An empty food court CAN speak volumes

44. Built in 1965, the mall lost its luster and its
owner suffered a financial crisis
Landmark Mall is ADAPTING

45. The mall is being repositioned by new
owners to become more of an urban
mixed-use project.
Landmark Mall is ADAPTING

46. Some stores are demolished and apartments
being added will increase local population.
The roof comes off.

47. Landmark Mall is ADAPTING
Circulation is improved by reshaping and
reorganizing the vertical circulation and making
the entire space more walkable and appealing.

48. Repositioning required cooperation
from many stakeholders
• Department stores
• Existing mall retail tenants
• Office tenants
• Government agencies
• Mall owners
Landmark Mall is ADAPTING

49. It required a
VISION
with solutions

50. So far what have we learned?

51. So far what have we learned?
Malls die when they don’t adapt

52. So far what have we learned?
Malls die when they don’t adapt
Too much of the “same” retail hurts malls

53. Malls die when they don’t adapt
Too much of the “same” retail hurts malls
Rents are on the increase
So far what have we learned?

54. Malls die when they don’t adapt
Too much of the “same” retail hurts malls
Rents are on the increase
Sales are on the increase
So far what have we learned?

55. Malls die when they don’t adapt
Too much of the “same” retail hurts malls
Rents are on the increase
Sales are on the increase
Mall NOI is on the increase
So far what have we learned?

56. There’s still one nagging question.
What about…

58. There, we’ve put it out there!

59. How do they shop?
Not in malls.
Right?

60. Wrong!
Source: OpinionLab

61. Wrong!In a 2014 OpinionLab survey:
• 85% of Millennials plan to head to the mall at least
once this summer
• 60% say they will go at least once a month
• Nearly half (48%) of Millennials rank browsing
different stores as their #1 reason to go to the mall
• Only 1 in 10 Millennials says nothing would
motivate them to spend more time in the mall
Source: OpinionLab

62. Biggest shocker
Millennials are the only generation that prefer the mall to shopping online (37% to 27%)
Source: OpinionLab

63. For Retailers Appealing To Millennials
"It's less about commerce first more about engaging the consumer
Source: Aria Hughes, an editor for the online trend forecaster WSGN
&

64. “The mall that’s dead
probably needed to be. “
-Angelo Carusi
Principal, Retail Design
COOPER CARRY

65. Why.
“Because it did not (or would not) change to meet the needs
of the consumer. For over 2,000 years people have sought
venues in which to socially interact with others. Malls have,
and always will, provide that forum and space. It’s innate in
us, as human beings, to want to be around others. We have
found in malls a way to socially interact while filling another
basic need which is tending to the desires of the head, heart
and stomach. What better way to do that than with a retail
store, coffee shop or soothing water feature close by.”
-Angelo Carusi
Principal, Retail Design
COOPER CARRY

66. To sum it up . . . . .
“Almost from their beginning, malls told stories. Shoppers,
municipalities, tenants and even developers contributed to
the fabric which when woven together resulted in dynamic
places and spaces that became places to not just shop, but to
gather. Not much has changed in the essence of the mall.
What has, and always will change, is the demographics,
shopping preferences and retail itself. This requires that malls
change as part of the evolutionary process. It doesn’t
necessarily mean that all malls are dead. It does, however,
mean that all malls can die. It’s the mall’s sensitivity to
change combined with the will to do so that will live on.”
-Gar Muse
Principal, Retail Design
COOPER CARRY

67. Let’s start a conversation…
COOPER CARRY, 191 Peachtree Street NE, Suite 2400, Atlanta, GA, 30303, 404-237-2000
Angelo Carusi, AIA, LEED AP,
CDP, CRX
Principal –
Retail Specialty Practice Group
angelocarrusi@coopercarry.com
404-358-4815 - cell
Gar Muse, AIA
Principal –
Retail Specialty Practice Group
garmuse@coopercarry.com
404-219-3895 - cell

69. Credit where credit is due:
• The Economics (and Nostalgia) of Dead Malls The New York Times, Jan. 3, 2015
• N. American REIT & Real Estate Research Reports, Green Street Advisors, 2015
• Victor Gruen and the Birth of the Shopping Mall, Labelscar, Aug. 22, 2012
•The De-Malling of America: What's Next for Hundreds of Outmoded Malls?,
CoStar, Oct. 3, 2012
•Opinion Lab: Fresh insight into millennials, malls & the future of the store,
March 30, 2014
•Retailing Today: Report: Malls not dead, far from it. March 30, 2015