Malls Survive With Alternative Uses

Since the industry has faced a rash of store closures in the last year, landlords are looking for other types of tenants to fill spaces.

In Scranton, PA, the local paper talks focuses on the Mall at Steamtown, which is operated by Fameco Real Estate and apparently 17% vacant. Management is now focusing on non-traditional tenants to fill up that space.

Nonprofits are even going into that mall, like Timmy’s Town Center, an organization that creates children’s museums and is now housed on the second floor. The center also features a gallery with work by local artists.

Will this become more of the norm at malls across the country, or can landlords not pick up the revenues they need from these types of tenants?

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6 Responses to “Malls Survive With Alternative Uses”

  1. 1 Whitaker Leonhardt January 29, 2010 at 9:50 am

    I think that malls, especially malls that are frequented by local residents as opposed to tourists, will continue to seek alternative uses. The struggling malls that will turn around will have to focus on an ongoing relevance to the community. The strength of the mall will lie in its ability to become a true town center, with uses ranging from schools, churches, fitness centers, professional offices, medical offices, medical services, regular services (hair cuts, shoe shines, watch repairs, etc.), convenience stores, grocery stores, and retail uses. Consumers will be able to meet all of their needs by shopping at the nearest mall.

  2. 2 Keith Mazikowski January 30, 2010 at 10:01 am

    There have been reports that a mall near Laurel Race Track in Maryland had been seeking a Casino. Talk about adaptive re-use!

    As the housing market rebounds, I think most mall owners will seek mixed use development to provide a base of population for their tenants.

    As you indicate, “Alternative uses will be the norm”.

    Always enjoy your blog.

  3. 3 James February 1, 2010 at 5:58 pm

    I think this is a mine field for mall owners. Every non traditional, non-retail, public, or alternative user that locates in a Mall works against the Malls primary concept with few exceptions. Non Profits, public agencies, religious users, health clubs, etc, only serve to dilute the Malls appeal to shoppers. Malls are privately owned, they are not community centers, they are not part of the inventory of public property, nor can or should they be managed as if they were. I hope Mall owners will not succumb to the temptation to try to make these alternative uses work, they don’t.

  4. 4 Mike February 3, 2010 at 2:40 pm

    James, that’s certainly not very outside-the-box thinking. Focusing on only traditional retail uses gets to the core of why many malls outside of the most successful are struggling mightily right now. People WANT mixed-use town centers, not just isolated private centers accessible only by vechicle isolated from the rest of their communities. People want more than to have a detached central place deposit their money for goods and services that can often be obtained more cheaply and easily elsewhere. Tough times force fixed ideas to evolve and the outdated, inefficient development models will need to adapt to survive. By the way, residents are more than just “shoppers” or consumers, they’re citizens as well and want their community needs to be met as well. Developers that recognize and cater to that will be better positioned to weather the recession ahead.

    • 5 James February 3, 2010 at 5:50 pm

      The traditional enclosed Mall design with anchors on four ends of a cross shape walk way with a double row of stores connecting them and a central public area just do not lend themselves very well to a town center concept. This design closes in on itself turning a pretty cold shoulder to the exterior. In fact most of the exterior except for entries is used as service/loading area. Also these Malls were purpose located on cheaper land with freeway and or interchange exposure, not necessarily adjacent to dense housing, although some have had residential subdivisions move in close to them.
      I have learned that real estate projects have a significant degree of organic and inherent purpose designed into them. Changing that purpose even with the most creative of thinking is very difficult. When you introduce a mixture of uses proper and successful solutions become even more elusive.

  5. 6 Market Participant February 18, 2010 at 1:43 am

    No sane person wants to attend church at a mall. These alternative uses attract a non-retail clientele, which ultimately weakens the mall’s value proposition to authentic retail tenants.

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