Malls need a new business model: report

Report suggests mall landlords should seek tenants in growing industries like beauty, home furnishings, and restaurants

TRD MIAMI /
Sep.September 06, 2017 12:45 PM

The fall of big box retail has led researchers at CBRE to conclude that the 70-year-old mall business model needs an update.

A report released Tuesday by the real estate services firm revealed that malls need to look for tenants that are less susceptible to e-commerce competition, The Wall Street Journal reported.

CBRE findings suggested that malls should shift sights towards tenants in growing industries including beauty, home furnishings, and restaurants.

Figures from the report revealed that big box department stores like Macy’s and Dillard’s still occupy about 50 percent of mall retail space. Additionally, 29 percent of leasable mall space is occupied by accessories and clothing retailers that are also susceptible to e-commerce competition, according to the Journal.

“Many department store chains gradually have become more accepting of change, but it isn’t a given,” the report read. “Those who reject change may do so at their own peril: There is a growing trend of mall owners buying out department store leases and redeveloping the space into restaurants and specialty stores.”

With the mass exodus of department stores from malls, warehouse landlords have been turning to the vacancies as potential sites for customer fulfillment centers and delivery sites. Last month, activist investors also showed interest in failing department stores like Dillard’s, hoping to unlock potential property values. [WSJ] Grace Guarnieri


Related Articles

arrow_forward_ios
920-1934 Stirling Road in Broward and 510 Linton Boulevard in Delray Beach (Google Maps, iStock)

South Florida’s retail market weakens in Q3

South Florida’s retail market weakens in Q3
Seritage CEO Benjamin Schall, CTO CEO John Albright, and 1460 West 49th Street, Hialeah (Credit: Google Maps)

Seritage sells Hialeah shopping center for $21M

Seritage sells Hialeah shopping center for $21M
Southland Mall, 20505 South Dixie Highway in Cutler Bay with JLL's Tom Hall and Danny Finkle (Google Maps, JLL)

Southland Mall’s troubled $65M CMBS loan for sale

Southland Mall’s troubled $65M CMBS loan for sale
From left: Chris Maling, Donald K. DeWoody Jr., David Maling, and Alfredo Sanchez

North Palm Beach mixed-use property hits the market for $45M

North Palm Beach mixed-use property hits the market for $45M
Raanan Katz and 10760 Northwest 17th Street in Sweetwater (Photos via RK Centers; Raanan Katz)

Miami Heat minority owner pays $20M for Sweetwater Best Buy

Miami Heat minority owner pays $20M for Sweetwater Best Buy
27359 South Dixie Highway and Longpoint Realty Managing and Founding Partner Dwight Angelini (Google Maps)

Longpoint buys Fresco Y Mas-anchored center in Naranja

Longpoint buys Fresco Y Mas-anchored center in Naranja
Hard Rock Cafe at Bayside Marketplace (Hard Rock)

Bayside Marketplace sues to evict Bubba Gump, Hard Rock Cafe and three other tenants

Bayside Marketplace sues to evict Bubba Gump, Hard Rock Cafe and three other tenants
Commissioner Ricky Arriola and an aerial of Sunset Harbour in Miami Beach (Compass)

Miami Beach moves toward banning chain restaurants and stores in Sunset Harbour

Miami Beach moves toward banning chain restaurants and stores in Sunset Harbour
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...