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If malls die, what will happen to the space?

The conventional wisdom is that the “age of the mall” is slowly but surely coming to an end. Truthfully, malls are a particular quirk of the American retail landscape. They initially catered to consumers in an era when people moved out of cities and into more suburban areas. A failed mall’s expansive real estate footprint could be repurposed, resold or renovated; that choice depends on the investor’s individual preference.

What is the reason for the fall of the mall?

According to Forbes, the demise of “the mall” has been in process for over 20 years, precipitated by the advent of online shopping. The reasoning for the consumer’s decreasing interest in shopping at a mall is simple, why go to a mall when you can find it online quickly and get it delivered. More recently, this reasoning has heavily impacted anchor stores.

An anchor store is a store that draws in shoppers. They typically take up multiple floors and in. In the Galleria of Houston, the anchors are Macy’s, Nordstrom, Sak’s Fifth Avenue and Neiman Marcus. However, Nordstrom has closed stores across the country in the last two years. Many expect this trend to continue.

Reinvention or renovation

Mall property owners face a crossroads with their current property investments. If they believe that malls will resurge, it will make sense to reinvest to attract new anchor stores. However, if the trend continues, they may have to consider new options.

One local mall is taking steps to shift into an “experience” based business. The hope is that instead of focusing on shopping to prop up the marketplace, an experience and an attraction will drive consumers back into the mall in the future.

It is a gamble, and if it does not off, then soon, there might be a significant amount of open, commercially zoned real estate in prime areas around Houston and the rest of the country.

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