In the wake of the COVID-19 pandemic and the shift in American culture, there is still a lack of demand for in-person shopping. Many sectors, such as outlets, malls and shopping plazas, continue to feel the hit, and many have been forced to close. From the disappearance of the mall to mall redevelopment, read on for more information on this trending topic.
From ordering gifts to purchasing groceries for the week, online shopping has become popular. With favored shopping outlets like Amazon offering two-day shipping and hassle-free return processes, malls across America are shutting doors for good.
The construction of the first Shopify U.S. distribution center in south Atlanta in 2021 further emphasized the decline of the American mall in the southeast. Gone are the days of record-breaking holiday savings events and teenagers crowding the food court, and in its place is an increase in online shopping from the comfort of home.
Uncertain futures and sizable vacancies spurred on already-existing problems, causing malls to resemble ghost towns after the wake of the pandemic. Green Street, a real estate analytics firm, estimates that 750 out of the 1,000 malls currently open in the U.S. have lost large leasing slots that traditionally feature leading brands such as Sears and Macy’s. Losing popular tenants is challenging during regular times, never mind the virtually impossible recovery rate during a pandemic.
The nostalgia of shopping at major retail centers is no longer enough to save stores from declaring bankruptcy or closing doors to break even. Many malls receive a B—to D—rating, which means they have fewer sales per square foot than a mall with an A rating. According to CNBC, an A++ mall receives $1,000 per square foot of real estate, while a mall with a C+ rating receives around $320 per square foot. CNBC also predicts that by 2022, a third of malls will disappear.
Mall Redevelopment
Mall redevelopment is a hot topic. According to The Washington Post, a trending last-ditch effort is transitioning to mixed-use developments with elements such as ski resorts, water parks and aquariums. The article expands on an extreme last attempt of a New Jersey mall operator, opening the doors of a $5 billion shopping center by next spring.
The American Dream shopping center is a comprehensive, fun-for-the-whole-family experience. Investors incorporating elements hope to attract visitors, extend visits and prevent permanent shutdowns. By leasing to higher-earning tenants and investing in components such as eateries, spas, and specialty gyms, the mall has brought back the desire for weekly visits to the mall, with a shift to entertainment instead of shopping.
So, what’s going on with mall redevelopment in Atlanta? Here’s a roundup:
Cumberland Mall
The Cumberland Mall redevelopment project includes adding office towers and apartments to part of the mall’s parking lot as part of a broader effort to replicate the success and density of the nearby Battery Atlanta. Other cool projects in the area include the Cumberland Sweep, which is in the planning stages by the Cumberland Community Improvement District. This $44 million multimodal trail is a bike and pedestrian pathway to connect Truist Park, The Battery Atlanta, Cumberland Mall and other attractions. Think of it as Cobb County’s version of the Atlanta Beltline.
Gwinnett Place Mall
According to reports by the Atlanta Business Chronicle, the dream of transforming the former Gwinnett Place Mall into a modern retail center and transit hub is one step closer to reality. The Planning firm Vanasse Hangen Brustlin, Inc. is creating the master plan for the site and will lead the revitalization strategy. The project aims to create a hub for rapid bus transit along Satellite Boulevard. The project received $275,000 in grants from the Atlanta Regional Commission’s Livable Centers Initiative. Gwinnett Place Mall will also connect to the proposed Loop Trail, part of the county’s ambitious expansion plan to double the existing trail system to 310 miles.
Lenox Square
Lenox Square received a multi-million dollar upgrade to its façade. The impressive two-story glass facade welcomes shoppers to full-service restaurants like The Cheesecake Factory and True Food Kitchen. This dramatic entrance showcases the iconic property’s street-side presence, including a glass-covered porte-cochere and valet amenities for easy access. The property boasts Bloomingdale’s, Neiman Marcus and Macy’s and features nearly 250 specialty stores like FENDI, Burberry, Cartier, David Yurman, Louis Vuitton, Vineyard Vines and Zara. A new hotel is planned to open in 2022. Hyatt Centric Buckhead is a six-story hotel on the “edge” of Lenox Square Mall.
The Mall West End
According to AJC reports, New York real estate firm Tishman Speyer went under contract to purchase The Mall West End in March. The plan was to develop a 1.3-million-square-foot complex that included residences, offices, and retail areas. Unfortunately, Tishman Speyer has exited the project. We will keep you posted as we hear updates to this story.
The Mall at Stonecrest
Once again, the Mall at Stonecrest is facing foreclosure. Reports from Atlanta Bisnow state that mall owner Urban Retail Properties has been attempting to renegotiate aspects of a $92M commercial mortgage-backed security loan secured by a portion of the 1.2M SF mall. Plans to sell the mall to new owners failed to close in 2019.
North DeKalb Mall
Demolition of the former North Dekalb Mall began on June 26, marking the next step towards construction of Lulah Hills. The new 73-acre mixed-use development is set to include 320,000 square feet of retail and restaurant space, residential units, a 150-key hotel and a walking trail that connects Lulah Hills to Emory University. The first phase of retail stores is expected to open in 2025.
Phipps Plaza
The redevelopment at Phipps Plaza includes some fun additions including a Nobu Hotel/restaurant and a Life Time Fitness. Amy Williams with Life Time Fitness told Buckhead.com that they are planning to open the new facility in late 2022. She also confirmed that, “the Life Time will be approximately 90,000 square feet once completed, and include one floor for Life Time Work, our premier coworking space, and two floors dedicated to our Life Time athletic resort.” Rounding out the mall redevelopment is One Phipps Plaza, a 13-story, 350,000-square-foot office building.
Citizens, a new 24,000 sq. foot lifestyle food hall, will spearhead the evolution of the redeveloped Phipps Plaza by injecting new energy and culinary concepts into the destination’s iconic footprint on Peachtree Street. Citizens is a collaboration between Simon and Sam Nazarian’s C3.
The food hall is expected to feature a selection of C3’s most popular brands such as Umami Burger, Krispy Rice and Sam’s Crispy Chicken. Citizens will utilize C3’s signature ghost kitchen model to offer sit-down dining, pick-up and local meal delivery for the surrounding Buckhead community.
Macon Mall
With the newest addition of the world’s largest indoor pickleball court, the mall is attracting visitors from across the country and beyond. Last December, 650 pickleball players showed up for Southern Pickleball’s Candy Cane Classic. The facility makes use of the old Belk department store, including 32 courts that span two floors. Other redevelopments include the addition of government offices in empty storefronts and an amphitheater that seats 12,000 people and is set to host country singers Koe Wetzel and Jason Aldean this year.
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