Retail Malls Look For New Innovations, Commerce And Otherwise

shopping mall interior

What to do with retail malls?

How about making them into doctors’ offices? That is among the latest trends as retail reinvents itself, and technology and other trends force new uses for old commerce spaces.

According to a recent report from CNN, “Mall of America in Minneapolis, America's largest mall, announced plans last week to open a 2,300-square-foot walk-in clinic in November with medical exam rooms, a radiology room, lab space and a pharmacy dispensary service. Mall of America is teaming up with University of Minnesota physicians and a Minnesota-based health care system to operate the clinic.”

Mall Leases

The report went on to note that “while mall leases for clothing retailers declined by more than 10% since 2017, medical clinics at malls have risen by almost 60% during the same period, according to Drew Myers, real estate analyst at CoStar Group.”

It’s not only healthcare that’s driving possible new rents at emptying shopping malls.

Malls are not exactly the hotspots of coolness and retail activity they once were. But operators of some of those shopping destinations continue to wield investment power as malls undergo remakes for the 21st century. Among the latest examples of that trend comes from Simon Property Group, the largest mall operator in the United States, which, according to Reuters, “will invest $5 million in Allied Esports.”

Allied Esports describes itself as “a premier esports entertainment company with a global network of dedicated esports properties and content production facilities.” How exactly the investment will be used was not immediately clear.

Simon is doing its best to protect its interests. While mall vacancy rates rose during the first quarter to 9.3 percent from 9 percent in the fourth quarter of 2018, Simon has been adding new types of tenants to its malls. The company plans to open at least five Marriott International hotels at its properties in the coming years, and at its Phipps Plaza mall in Atlanta, there will be a Nobu Hotel and a 90,000-square-foot Lifetime Fitness complex.

Earlier this year, Simon Property Group CEO David Simon told analysts that while he thinks retail store closures will slow down this year, he “can’t guarantee it.” Those latest comments came after Simon admitted in February that he was “nervous” about additional retail bankruptcies happening during the first quarter. Later in that month, teen apparel retailer Charlotte Russe, personalized gift company Things Remembered and shoe retailer Payless filed for bankruptcy. In fact, there have been more store closures announced by U.S. retailers so far this year than in all of 2018.

New Investment

The new investment from Simon Property Group comes as many malls are getting remakes for the 21st century. Digital technology and lifestyles are playing a part in those efforts.

Malls also are finding new life as offices for tech companies, as developers are repurposing space formerly held by retail tenants into workplaces with high-end amenities for firms like Google. In Los Angeles, part of the Westside Pavilion is set to be redeveloped into a 584,000-square-foot office for the tech company in a project that is slated to finish in 2022.

The mall, which is owned by Hudson Pacific Properties Inc. and Macerich Co., is still operating, but renovations will start later this year. After the office is finished, it will include open spaces, a garden deck on the roof and large terraces. And in order to make those amenities happen, the spaces will have to be reconfigured. “Walls will be taken down,” Hudson Pacific Properties Chairman and Chief Executive Victor Coleman told The Wall Street Journal.

The rise of eCommerce and the evolution of omnichannel retail are placing significant burdens on brick-and-mortar retail. That will bring more new efforts to make better use of those old spaces in 2019 and beyond.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.