Top-Tier Malls Attract Shoppers and Capital as Others Face Demolition

Walk into a top-tier mall in a high-income suburb right now and you can still feel echoes of the holiday rush: full parking decks, busy food halls and steady lines at the “can’t-get-it-online” stores. Drive 20 minutes in the other direction and you may find an enclosed mall that feels more like a stranded asset, with dark corridors, empty anchor boxes and “for lease” signs that have become part of the décor.

The post-holiday verdict is not that malls are back or dead. It is that the U.S. mall sector has split into two distinct property types, and the performance gap is widening.

Foot-traffic data captures that divide. According to Placer.Ai’s December 2025 Mall Index, indoor malls were the only major mall format to post visit gains in all four quarters of 2025, suggesting the strongest enclosed centers have moved from recovery to growth. Open-air centers outperformed over the holidays, with Q4 visits up 2.0% year over year and December up 1.5%, while outlet malls lagged, including a 1.1% holiday-season drop in visits.

Payments data reinforces the in-store story. Visa’s holiday spending analysis showed overall holiday retail spending rose 4.2% year over year, with 73% of holiday payment volume occurring in physical stores. eCommerce grew faster, up 7.8%, but from a smaller base. For mall operators and the banks and payments firms that serve their merchants, strong in-store demand translates directly into card volume.

The Winners: Reinvented, Reinvested and Repositioned

The malls that are thriving share a familiar formula: affluent trade areas, high occupancy, constant reinvestment and an experience mix that turns shopping into an outing.

Simon Property Group’s Q4 and full-year 2025 results offer a snapshot of that upper tier. The company reported 96.4% occupancy, base minimum rent of $60.97 per square foot and trailing 12-month retailer sales of $799 per square foot. Those metrics support redevelopment, upgrades and stronger tenants, creating a feedback loop that weaker properties struggle to replicate.

Macerich’s acquisition of Crabtree Mall in Raleigh, N.C. provides another example. In the deal announcement, the company highlighted $429 million in annual sales, $951 in sales per square foot and more than 8.7 million annual visitors, alongside plans for roughly $60 million in redevelopment and leasing capital through 2028. That level of spending signals a belief that certain malls can continue pulling consumers off couches and into stores.

According to the data cited by Cushman & Wakefield’s A-rated malls are just 4% below pre-2019 traffic levels, compared with a 9% drop for B malls. Occupancy follows a similar ladder: 95% for A malls, 89% for B malls and 72% for C-rated malls and below. The sector’s health increasingly depends on quality and location rather than a broad-based retail rebound.

The Strugglers: Conversions, Complications and Capital Gaps

At the other end of the spectrum are malls with weaker anchors, thinner tenant demand and less capital for reinvention. Even when owners pursue mixed-use transformations into housing, healthcare, education or entertainment hubs, execution can stretch for years.

The challenges are visible in case studies. The San Francisco Chronicle covered that SF Centre was effectively hollowed out, citing a report that it was 93% empty. Converting such properties is more complex than it sounds, given large floor plates, the need for natural light in residential units and legal complications such as foreclosure and ground leases.

Outside major urban cores, the hurdles are often infrastructural. CT Insider reported that redevelopment of Westbrook Outlets in Connecticut could see partial demolition begin in 2026, but plans hinge on approvals for a sufficiently large community septic system. When redevelopment was first announced, the property’s retail footprint was reported to be roughly 25% occupied.

Even when capital is available, the process is messy. Shifting ownership, government approvals, incentives negotiations and stakeholder pushback routinely delay conversions. The result is a long tail of properties in transition, neither fully retail nor fully reimagined.

Looking ahead, the divergence appears set to continue. CBRE’s 2026 retail outlook projects widening performance gaps by format and location, with strong suburban and grocery-anchored corridors outperforming while weaker malls lag due to capital needs and slower leasing. Meanwhile, ICSC’s 2026 predictions forecast store openings excluding restaurants up 1.4% in 2026, led by off-price, beauty and discount categories.