Brookfield: "Death of the mall was a myth"

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Brookfield: "Death of the mall was a myth"

Post by ClownLoach »

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Re: Brookfield: "Death of the mall was a myth"

Post by pseudo3d »

Despite the "we're working past the department stores" talk, there's a lot of things wrong with malls still. Most of the department store replacements aren't real replacements (often not connecting into the mall), unique specialty stores are almost extinct, and despite hopes that some malls will revert to a more 1960s-era merchandise mix that's not happening (no liquor stores or paint stores).
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Re: Brookfield: "Death of the mall was a myth"

Post by babs »

pseudo3d wrote: May 14th, 2024, 9:54 am Despite the "we're working past the department stores" talk, there's a lot of things wrong with malls still. Most of the department store replacements aren't real replacements (often not connecting into the mall), unique specialty stores are almost extinct, and despite hopes that some malls will revert to a more 1960s-era merchandise mix that's not happening (no liquor stores or paint stores).
Agreed. For malls to be come relevant, they need to be more than a collection of clothing and jewelry stores. Adding gyms and bowling alleys is great as you said, they usually face outside and are nothing more than a space filler, contributing nothing to the shopping experience.
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Re: Brookfield: "Death of the mall was a myth"

Post by ClownLoach »

babs wrote: May 14th, 2024, 10:23 am
pseudo3d wrote: May 14th, 2024, 9:54 am Despite the "we're working past the department stores" talk, there's a lot of things wrong with malls still. Most of the department store replacements aren't real replacements (often not connecting into the mall), unique specialty stores are almost extinct, and despite hopes that some malls will revert to a more 1960s-era merchandise mix that's not happening (no liquor stores or paint stores).
Agreed. For malls to be come relevant, they need to be more than a collection of clothing and jewelry stores. Adding gyms and bowling alleys is great as you said, they usually face outside and are nothing more than a space filler, contributing nothing to the shopping experience.
I have noticed the big home improvement stores are more hesitant to locate in malls in the US. I can think of one Home Depot on the outskirts of a mall and it does well but really is so far it is off property for all intents and purposes. In Canada it is more common to see home improvement stores, supermarkets, drugstores, electronics stores, and office supply stores in the mall. The shift of the American mall to a predominantly apparel based enterprise has led to the problem.

The struggle that is described here with replacement tenants disconnected from the mall goes back to the conversation about the billion dollar investment into JCPenney. The older the department store building, the less suitable it will be for conversion. Buildings put up in the 90s and newer generally are easily converted because they were structurally simple boxes with drywall partitions. But older department stores were constructed differently, have more structural walls dividing the space that can't be easily removed, can't be opened up easily etc. plus terrible logistics designed for a different era of retail (basement receiving areas and small freight elevators with limited weight capacity besides Z racks of clothing). Many times when they try to convert these older boxes to a bowling alley or gym the end results are very bad.

The older dead department store boxes need to be leveled and replaced, and that changes the cost structure limiting what could go in there. That is why you see the replacement of choice being apartments because of the much higher rents. That and the higher apartment rents offset the lower rents that the mall stores are paying today.

I expect that we will continue to see these conversions of say an old 250,000 Sq ft 3 story Sears become 300 to 400 apartment units along with maybe 100,000 Sq ft of retail and apartments. Two thirds of the retail leaseable space still goes away in the mixed use conversion.
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Re: Brookfield: "Death of the mall was a myth"

Post by pseudo3d »

ClownLoach wrote: May 14th, 2024, 11:14 am
babs wrote: May 14th, 2024, 10:23 am
pseudo3d wrote: May 14th, 2024, 9:54 am Despite the "we're working past the department stores" talk, there's a lot of things wrong with malls still. Most of the department store replacements aren't real replacements (often not connecting into the mall), unique specialty stores are almost extinct, and despite hopes that some malls will revert to a more 1960s-era merchandise mix that's not happening (no liquor stores or paint stores).
Agreed. For malls to be come relevant, they need to be more than a collection of clothing and jewelry stores. Adding gyms and bowling alleys is great as you said, they usually face outside and are nothing more than a space filler, contributing nothing to the shopping experience.
I have noticed the big home improvement stores are more hesitant to locate in malls in the US. I can think of one Home Depot on the outskirts of a mall and it does well but really is so far it is off property for all intents and purposes. In Canada it is more common to see home improvement stores, supermarkets, drugstores, electronics stores, and office supply stores in the mall. The shift of the American mall to a predominantly apparel based enterprise has led to the problem.

The struggle that is described here with replacement tenants disconnected from the mall goes back to the conversation about the billion dollar investment into JCPenney. The older the department store building, the less suitable it will be for conversion. Buildings put up in the 90s and newer generally are easily converted because they were structurally simple boxes with drywall partitions. But older department stores were constructed differently, have more structural walls dividing the space that can't be easily removed, can't be opened up easily etc. plus terrible logistics designed for a different era of retail (basement receiving areas and small freight elevators with limited weight capacity besides Z racks of clothing). Many times when they try to convert these older boxes to a bowling alley or gym the end results are very bad.

The older dead department store boxes need to be leveled and replaced, and that changes the cost structure limiting what could go in there. That is why you see the replacement of choice being apartments because of the much higher rents. That and the higher apartment rents offset the lower rents that the mall stores are paying today.

I expect that we will continue to see these conversions of say an old 250,000 Sq ft 3 story Sears become 300 to 400 apartment units along with maybe 100,000 Sq ft of retail and apartments. Two thirds of the retail leaseable space still goes away in the mixed use conversion.
Mall 205 in Portland added an interior Home Depot but the whole mall was already an attempt to save a 1970s regional center that really should've been converted to a power center years ago. I don't think that apartment units are a good choice for retail conversions (they're at the greatest risk for becoming unprofitable, or a problem), and while I like the idea of supermarkets being attached to malls, I believe part of the problem is a lot of leases require some level of profit-sharing, and that's not good for a low-margin business that keeps to itself.

With J.C. Penney now being owned as a joint venture between Brookfield and Simon, the solution going forward seems to be what overseas have done, is develop their own stores to anchor malls. I think there's enough space in the market to develop some sort of mid-range hypermarket, but that's just me...
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Re: Brookfield: "Death of the mall was a myth"

Post by buckguy »

pseudo3d wrote: May 15th, 2024, 11:58 am
ClownLoach wrote: May 14th, 2024, 11:14 am
babs wrote: May 14th, 2024, 10:23 am
Agreed. For malls to be come relevant, they need to be more than a collection of clothing and jewelry stores. Adding gyms and bowling alleys is great as you said, they usually face outside and are nothing more than a space filler, contributing nothing to the shopping experience.
I have noticed the big home improvement stores are more hesitant to locate in malls in the US. I can think of one Home Depot on the outskirts of a mall and it does well but really is so far it is off property for all intents and purposes. In Canada it is more common to see home improvement stores, supermarkets, drugstores, electronics stores, and office supply stores in the mall. The shift of the American mall to a predominantly apparel based enterprise has led to the problem.

The struggle that is described here with replacement tenants disconnected from the mall goes back to the conversation about the billion dollar investment into JCPenney. The older the department store building, the less suitable it will be for conversion. Buildings put up in the 90s and newer generally are easily converted because they were structurally simple boxes with drywall partitions. But older department stores were constructed differently, have more structural walls dividing the space that can't be easily removed, can't be opened up easily etc. plus terrible logistics designed for a different era of retail (basement receiving areas and small freight elevators with limited weight capacity besides Z racks of clothing). Many times when they try to convert these older boxes to a bowling alley or gym the end results are very bad.

The older dead department store boxes need to be leveled and replaced, and that changes the cost structure limiting what could go in there. That is why you see the replacement of choice being apartments because of the much higher rents. That and the higher apartment rents offset the lower rents that the mall stores are paying today.

I expect that we will continue to see these conversions of say an old 250,000 Sq ft 3 story Sears become 300 to 400 apartment units along with maybe 100,000 Sq ft of retail and apartments. Two thirds of the retail leaseable space still goes away in the mixed use conversion.
Mall 205 in Portland added an interior Home Depot but the whole mall was already an attempt to save a 1970s regional center that really should've been converted to a power center years ago. I don't think that apartment units are a good choice for retail conversions (they're at the greatest risk for becoming unprofitable, or a problem), and while I like the idea of supermarkets being attached to malls, I believe part of the problem is a lot of leases require some level of profit-sharing, and that's not good for a low-margin business that keeps to itself.

With J.C. Penney now being owned as a joint venture between Brookfield and Simon, the solution going forward seems to be what overseas have done, is develop their own stores to anchor malls. I think there's enough space in the market to develop some sort of mid-range hypermarket, but that's just me...
Early malls had bowling alleys, because those had been a feature of the large 50s' open malls that preceded them. That's why they had supermarkets, hardware stores, furniture stores, etc. Often things like super markets and service businesses went into a "convenience wing" that was separate from the mall.

Malls in other countries usually did not evolve into homogeneous operations as they did here. Some are owned by department stores which anchor them, but many are not. There are high-end designer-filled malls, but a typical mall will sell more than just clothing at a narrow range of price points. Many places also have forms of retail that we don't have here---there are malls in Thailand that have large spaces set-up as public markets with stalls selling all kinds of crafts, commodities, electronics, etc. These usually are on upper floors, along with food courts that are collections of food vendors rather than chains. They also have categories that don't exist here like American Standard retail stores (I've seen a Kohler store in NYC but nowhere else).

The decline of the original low-end stores in malls (fast fashion stores for women, cheap dress clothing for men) during the 80s, led to malls being much more limited in terms of price points, unless the malls were failing. The non-apparel retaiIers were artifacts of the first generation of large open malls and probably left as their leases ended. There are now categories of stores that don't exist anymore or only exist as well-managed local operations: full-line mens stores, book stores, music stores, etc. There's no new generation of "mall stores" and the newer kinds of etail are happy not to be in a mall. I don't think you can retrofit malls in the US to be like they are elsewhere---these efforts usually come when it's too late to bring people back and lack some sort of vision of how a complex can function as some sort of way to draw in a community or serve as a community.

Apartments and condos have been part of the development of lifestyle centers, which is probably the rationale for redeveloping malls with them. ClownLoach is right there are no more feasible ways to repurpose department store spaces as retail or other service space. The effort to remake malls as clinics, community colleges, etc. using up department store spaces always comes up short because there is so much space that needs to be absorbed.

Office parks are running into the same problems as malls---the buildings are impractical for much of anything else and are unlikely to attract new tenants. My old workplace was part of a half mile or so of 70s/80s buildings that are mostly empty despite many locational advantages (near shopping and stable residential areas, not far from a major freeway and a Metro stop). One recently came down and is being replaced by apartments--I'm guessing it won't be the last. Our old building is doing better but it was newer, has modern amenities including newly renovated conference spaces, and backs into a new lifestyle complex---it was an accident of history replacing a place that had "sick building syndrome", so it's 20 or 30 years newer than anything else. Otherwise only the buildings developed with medical offices or labs seem to be doing okay--those spaces are expensive to set-up and most of the work can only be done on site.
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Re: Brookfield: "Death of the mall was a myth"

Post by pseudo3d »

buckguy wrote: May 15th, 2024, 7:13 pm
pseudo3d wrote: May 15th, 2024, 11:58 am
ClownLoach wrote: May 14th, 2024, 11:14 am

I have noticed the big home improvement stores are more hesitant to locate in malls in the US. I can think of one Home Depot on the outskirts of a mall and it does well but really is so far it is off property for all intents and purposes. In Canada it is more common to see home improvement stores, supermarkets, drugstores, electronics stores, and office supply stores in the mall. The shift of the American mall to a predominantly apparel based enterprise has led to the problem.

The struggle that is described here with replacement tenants disconnected from the mall goes back to the conversation about the billion dollar investment into JCPenney. The older the department store building, the less suitable it will be for conversion. Buildings put up in the 90s and newer generally are easily converted because they were structurally simple boxes with drywall partitions. But older department stores were constructed differently, have more structural walls dividing the space that can't be easily removed, can't be opened up easily etc. plus terrible logistics designed for a different era of retail (basement receiving areas and small freight elevators with limited weight capacity besides Z racks of clothing). Many times when they try to convert these older boxes to a bowling alley or gym the end results are very bad.

The older dead department store boxes need to be leveled and replaced, and that changes the cost structure limiting what could go in there. That is why you see the replacement of choice being apartments because of the much higher rents. That and the higher apartment rents offset the lower rents that the mall stores are paying today.

I expect that we will continue to see these conversions of say an old 250,000 Sq ft 3 story Sears become 300 to 400 apartment units along with maybe 100,000 Sq ft of retail and apartments. Two thirds of the retail leaseable space still goes away in the mixed use conversion.
Mall 205 in Portland added an interior Home Depot but the whole mall was already an attempt to save a 1970s regional center that really should've been converted to a power center years ago. I don't think that apartment units are a good choice for retail conversions (they're at the greatest risk for becoming unprofitable, or a problem), and while I like the idea of supermarkets being attached to malls, I believe part of the problem is a lot of leases require some level of profit-sharing, and that's not good for a low-margin business that keeps to itself.

With J.C. Penney now being owned as a joint venture between Brookfield and Simon, the solution going forward seems to be what overseas have done, is develop their own stores to anchor malls. I think there's enough space in the market to develop some sort of mid-range hypermarket, but that's just me...
Early malls had bowling alleys, because those had been a feature of the large 50s' open malls that preceded them. That's why they had supermarkets, hardware stores, furniture stores, etc. Often things like super markets and service businesses went into a "convenience wing" that was separate from the mall.
Sometimes they were, sometimes they weren't. I can name a few malls that had Safeway or a regional grocery store in the mall corridor. Usually when the mall was enclosed these left the premises.

The "convenience wing" was more of a late 1960s/early 1970s idea that disappeared entirely within the end of the decade.
Malls in other countries usually did not evolve into homogeneous operations as they did here. Some are owned by department stores which anchor them, but many are not. There are high-end designer-filled malls, but a typical mall will sell more than just clothing at a narrow range of price points. Many places also have forms of retail that we don't have here---there are malls in Thailand that have large spaces set-up as public markets with stalls selling all kinds of crafts, commodities, electronics, etc. These usually are on upper floors, along with food courts that are collections of food vendors rather than chains. They also have categories that don't exist here like American Standard retail stores (I've seen a Kohler store in NYC but nowhere else).
There's a Kohler/American Standard showroom owned by a local plumbing supply store, and it appears that they'll be relocating out of their warehouse space into a strip mall, so it's not implausible.


The decline of the original low-end stores in malls (fast fashion stores for women, cheap dress clothing for men) during the 80s, led to malls being much more limited in terms of price points, unless the malls were failing. The non-apparel retaiIers were artifacts of the first generation of large open malls and probably left as their leases ended. There are now categories of stores that don't exist anymore or only exist as well-managed local operations: full-line mens stores, book stores, music stores, etc. There's no new generation of "mall stores" and the newer kinds of etail are happy not to be in a mall.
Even into the early 2000s every decent mall had a small collection of gift shops and specialty stores (there were like FOUR Texas stores in the Galleria). Nowadays you might have one anime/Japanese culture/nerd culture store in a regional mall and other common non-apparel retailers (Hallmark, etc.) but the specialty store culture that existed in malls is largely gone. They still are seen in tourist-oriented malls.
I don't think you can retrofit malls in the US to be like they are elsewhere---these efforts usually come when it's too late to bring people back and lack some sort of vision of how a complex can function as some sort of way to draw in a community or serve as a community.
The problem with enclosed malls today is either you're in a good neighborhood, and you're already doing fine with the apparel/typical mall mix (even if they've picked up a few B-class tenants along the way), or you're not, and their bad reputation works against them. Malls that lean into the "local" aspect is not high-quality local nor really provides a good merchandise mix. You really need some investors and some big names to do anything close to a full revitalization and make headlines.
Apartments and condos have been part of the development of lifestyle centers, which is probably the rationale for redeveloping malls with them. ClownLoach is right there are no more feasible ways to repurpose department store spaces as retail or other service space. The effort to remake malls as clinics, community colleges, etc. using up department store spaces always comes up short because there is so much space that needs to be absorbed.
Usually the problem is that with all the changes to the building (new windows, plumbing, electricity, etc.) and bringing it up to code just means it would be cheaper to demolish and rebuild.
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