Here is further evidence that suburban malls are well past their prime. The newest effort to create a “destination” shopping center is to install indoor surfing. According to the New York Times malls are paying up to $2,000,000 to have a Flowrider wave machine installed. Of course this latest shop-and-awe tactic for malls is just a hook for the story. The salient points are:
- mall rents are dropping
- dollar stores and discounters such as Big Lots are moving in
- grocery stores, medical facilities, dance studios and colleges may move in
- General Growth Properties has missed payments on $25B of debt
Finally, it’s not about the recession. From 1990-2005 spending per capita rose 14% while retail space per capita increased 100%. A reordering of the American retail landscape was inevitable. The current economic crises and rising energy costs likely tip the scales further against large suburban malls. We can expect more of this in the future:
Yet this need not be the last word. Currently succssful malls can reinvent themselves before they decline into dollar store status. Inviting medical facilities, schools, etc. into the mall is a positive step, but a residential component and transportation options are musts. I’ll be looking at a development in Vancouver, BC and looking at options for St. Louis soon.