As the pandemic progresses and Americans remain at home, businesses continue to suffer from the lack of physical customer interaction. Large sectors that have experienced considerable losses are malls and shopping plazas across the country. 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 a popular medium. With favored shopping outlets like Amazon offering two-day shipping and hassle-free return processes, malls across America are shutting doors for good.
Shopify recently announced its first U.S. distribution center set to open in south Atlanta, further wounding the state 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 750 out of the 1,000 malls currently open in the U.S. lost large leasing slots that traditionally feature leading brands such as Sears and Macy’s. Losing popular tenants is a challenging loss 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, 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 is a hot topic. According to The Washington Post, a trending last-ditch effort is a transition 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 will have a square footage set to surpass the Mall of America in Minnesota. 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 may once again become a weekly stop despite declining in-person shopping.
So what’s going on with mall redevelopment in Atlanta? Here’s a roundup:
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 project 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
The dream of transforming the former Gwinnett Place Mall into a modern retail center and transit hub is one step closer to reality according to reports by the Atlanta Business Chronicle. The Planning firm Vanasse Hangen Brustlin, Inc. is creating the master plan for the site and will lead the revitalization strategy. The goal of the project is to create a hub for rapid bus transit along Satellite Boulevard. To that end, the project received $275,000 in grants from the Atlanta Regional Commission’s Livable Centers Initiative. Gwinnett Place Mall swill 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, received a multi-million dollar upgrade to its façade. The impressive two-story glass facade welcomes shoppers to full-service restaurants such as 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 including residences, offices and retail. Unfortunately, Tishman Speyer has exited the project. We will keep you posted as we hear updates to this story.
Once again The Mall at Stonecrest is faced with 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
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.
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