As other retail formats struggle to keep vacancies in check, mall owners are aiming to take advantage of current market conditions to siphon off tenants.
Over the past 12 months, retailers that have traditionally operated freestanding stores or taken locations in power and lifestyle centers have increasingly signedat enclosed regional malls, say four property owners and three consultants Retail Traffic spoke to. If the trend continues, it could help regional malls remain retail mainstays in their trade areas, these sources say.
This coming October, for example, CBL & AssociatesInc., a Chattanooga, Tenn.-based REIT, will welcome a 46,500-square-foot Dick’s Sporting Goods store to its Layton Hills Mall in Layton, Utah. The retailer will take over a space vacated by Mervyn’s in December 2008. Meanwhile, Bed Bath & Beyond is currently hiring employees for its soon-to-open store at General Growth Properties’ Rogue Valley Mall in Medford, Ore. And Simon Property Group expects to open a 23,000-square-foot Container Store at its SouthPark mall in Charlotte, N.C. in the fall.
All of these retailers have operated in malls before, but typically have preferred freestanding locations or spots in neighborhood and power centers. A unique combination of market forces has made it an opportune time to expand into regional malls, according to Jeff Green, president of Jeff Green Partners, a Phoenix, Ariz.-based real estate consulting firm.