The ‘dead mall’ may not be a permanent blight on the suburban landscape after all.
The death of the American mall was inevitable, perhaps even desirable.
By the end of the last decade, the climate-controlled indoor shopping experience pioneered by architect Victor Gruen in 1956, with the opening of his Southdale Center mall in Minnesota, was going the way of the dodo. And maybe that was okay.
The few who perambulated the shopping mall’s corridors encountered a “‘ghostly’ ambiance” defined by few stores and fewer shoppers. Why endure such a funereal experience when online realtors offer shoppers more comfort, flexibility, and value? And maybe these consumerist behemoths were anti-social from the start. The mall contributed to the “decaying and perceived decline of downtown centers,” said one shopping mall historian in 2019. “Which, by the way, was also tied to white racism and urban renewal and all sorts of policies that had decimated black neighborhoods.”
On the eve of the pandemic, the mall seemed to be headed for a slow-motion extinction. Covid’s onset accelerated the mall’s “death spiral.” The sudden collapse of the department store model led underperforming but still-anchor tenants like Sears, Macy’s, JCPenney, and Lord & Taylor to withdraw from the market. With them went the usual foot traffic.
As visitations declined, so did the fortunes of the smaller retailers. The pandemic accelerated these trends. By the summer of 2023, lower-end malls had declined in value by 50 to 70 percent, according to the Wall Street Journal, with about 20 percent of all malls financed via mortgage-backed securities worth less than what their owners paid for them.
But 2019 also witnessed an explosion of latent shopping mall nostalgia — a phenomenon perhaps best illustrated by the Duffer Brothers’ hit show, Stranger Things.
The show’s third season, set in a mall circa 1985, sparked a blizzard of wistful reflections among Gen-Xers and geriatric Millennials who mourned the loss of an experience they wished their own children could also know. But that nostalgia wasn’t exclusive to the middle-aged.
“Maybe it was Stranger Things’ most recent season inspiring them, but Gen Zers (44%) are more likely than all other age groups (Millennials: 38%, Gen Xers: 30%, Baby Boomers: 28%) to hit shopping malls this holiday season,” the financial technology firm Klarna observed in 2021.
That was a leading indicator. Much like their oft-maligned cousin, the strip mall, the indoor shopping mall experience has undergone a wholesale renovation. Today, the mall is making a comeback.
“After years of lagging behind the commercial-real estate recovery,” the Journal reported Monday, “malls are outperforming every other property type as more investors conclude that enclosed shopping centers have more staying power than previously understood.” Malls are once again a top-performing part of the commercial property sector, with valuations up 13 percent over last year.
Many factors contribute to the mall’s comeback. The decline of the department store has allowed malls to ditch foundering tenants in favor of luxury retailers, who are less exposed to competition from online retailers. If you’re going to drop a significant amount of cash on name-brand apparel or jewelry, consumers increasingly want to see and feel the quality for themselves. Likewise, malls are reimagining consumer experience. Games, experiences, and high-end grocers and restaurants now occupy real estate vacated by the retailers that were ground down by the rise of online shopping — affordable apparel, toy stores, chain pharmacies, and the like.
There is also an unquantifiable element to the revitalization of the shopping mall. “You can really build the focal center for commerce, for getting together, for unity,” said Bahram Akradi, CEO of the upscale fitness center chain Life Time. “If we think about them as retail, that’s a mistake.”
There are tradeoffs here, of course. “Malls are resilient as hell,” the proprietor of one real estate development firm told the Journal. But their resilience depends on consumers’ increasingly pricey tastes. The fictionalized “Starcourt” mall that Stranger Things production designers built inside Georgia’s decrepit Gwinnett Place Mall isn’t coming back. Hermès and Dolce & Gabbana have replaced Wet Seal and Forever 21. Del Frisco’s and Eataly are crowding out Sbarro and Panda Express. The mall is increasingly catering to the deep-pocketed.
Those who once complained about the shopping mall’s decline and disappareance are almost certain to soon complain about how unaffordable those once-endangered outlets have become. How are Gen X and Millennial parents to recreate their childhood experiences for their kids if their kids have been priced out?
That would be a good problem for American suburbanites to have, but it’s one for another day. For now, we can allow ourselves a moment to rejoice. The “dead mall” may not be a permanent blight on the suburban landscape after all.