It seems that the bright, shiny, Class A shopping malls and centers get all the press—and all the tenants. Stories of high occupancy and higher rental rates abound, as retail tenants jostle for the right space to take advantage of foot traffic.
Then there are the older, less competitive “B Malls.” According to a recent article from Cushman & Wakefield, those properties have many challenges, including poor location, outdated design, and competition from e-commerce and newer lifestyle centers. In some cases, the only action to take is demolition.
Or maybe not. The report said that the B Malls can offer potential opportunities for investors. “Often priced below their original value, these properties are ideal for redevelopment into community-centric hubs, featuring a mix of residential, retail, and public spaces,” the report explained.
Adaptive reuse can help generate “significant returns” while driving economic growth in local communities. Additionally, “for retailers, these revitalized spaces offer the chance to thrive in environments with increasing foot traffic and elevated customer engagement,” the report noted.
Some workable redevelopment ideas can include:
- Mixed-use developments, including residential housing, office space, co-working hubs and hospitality services.
- Experiential spaces, with a focus on offerings like escape rooms, virtual reality entertainment, live music, or food halls with celebrity chefs.
- Healthcare and community locations, featuring medical offices, educational institutions and even municipal services.
- Anchor repurposing, which converts former department stores into large-format retailers, fitness centers, or indoor sports complexes.
The article acknowledges that B Mall repurposing won’t be easy or fast, especially in areas such as zoning, regulatory issues and financing. However, investors and owners with “a bold, forward-thinking vision” concerning B Mall upgrades could help with “redefining retail experiences and meeting the needs of modern consumers and communities.”
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