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Dead malls are a virus: getting creative with repurposing

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What’s a dead mall and why should you care?

2806974773 1cdb97b8df Dead malls are a virus: getting creative with repurposingAs new malls open in cities, the shine wears off of the older malls, patron shuffle over to the shiny and the older may end up closing as lease holders jump ship to newer areas. In other words, it dies. This typically happens in areas of town that are declining or that were overbuilt with retail space.

When a mall begins dying, it’s like a virus. But it doesn’t always happen in declining areas, some of the pictures below are of the Gateway Center in Austin which is in an upscale area but happens to have been hit by some big box bankruptcies. The end of the center is vacant and has been for some time, but the virus is in the decline of the buildings as lease holders are not keeping the buildings up anymore and strip mall or traditional mall owners are too strapped for cash (because of the rising vacancy rates) to do basic upkeep (regardless of what CAM other leases are paying).


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This all matters because residential agents make recommendations to home buyers and sellers based on all surroundings, including dead malls.

What can we do?

As an industry, we need to get creative. Not just on a single mall basis, but overall by pushing for legislation that allows grants for repurposing of dead spaces before they fall into such disrepair that they’ll be required to be bulldozed rather then repurposed (which isn’t exactly the most environmentally friendly move as it wastes a perfectly good shell building).

What could a dead mall become? Here in Austin, a mall that is no longer the city’s diamond mall (aka no one goes there anymore) may be redone to be a community college campus rather than demolished. Dead malls can become office buildings in areas where that is beneficial, or can become community center or indoor amusement centers. Right now, the commercial sector has no incentive to repurpose, it’s actually cheaper, faster and higher return to simply demolish, but to be honest, dead malls are frowned upon and typically continue falling into disarray.

What are some ways that our industry could help to repurpose dead malls? What are YOUR ideas?

Take a tour of some dead malls:

2806974773 1cdb97b8df Dead malls are a virus: getting creative with repurposing

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3851457078 ab8abe3f25 Dead malls are a virus: getting creative with repurposing

3629994198 bd7005950b Dead malls are a virus: getting creative with repurposing

3851456482 d42c878019 Dead malls are a virus: getting creative with repurposing

3445598751 bf477841a5 Dead malls are a virus: getting creative with repurposing

3532118994 ca388b9ec5 Dead malls are a virus: getting creative with repurposing

3190318086 dbfbb9ec12 Dead malls are a virus: getting creative with repurposing

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Lani Rosales

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AGBeat Chief Operating Officer: Lani, named one of Real Estate's 100 Most Influential, as well as 12 Most Influential Women in Blogging, is a business and tech writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often buried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat.

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  • http://agentgenius.com Benn Rosales

    This is really a failure on management and ownership to adapt and become flexible. Even in today’s tough market, PMs and developers are still proud of their empty office space/retail space and market pricing remains at levels from 2003 – utterly ridiculous. If the area is declining, I’m not sure retail becomes the answer, but as in the case of highland mall here in Austin, it made sense for ACC (Austin Community College) to snatch up the prime real estate. The land will continue to accrue in value because of its prime location in the center of Austin, and the school will flourish- incredibly creative.

    Some of the old malls should be demolished, but it seems that more attractive concepts could take their place- the real estate works.

    I grow more and more concerned with the outdoor mall concept, the old town center style shopping that is dependent on good weather for activity, a lack of close proximity parking limits the in and out of consumers. I’m sure some focus group somewhere said this was a good idea to for live/work highend, but somehow I doubt longterm living will every take place in a mall.

    • http://card.ly/laniar Lani Rosales

      “I doubt long term living will ever take place in a mall”

      >I totally agree UNLESS it is in a college campus scenario. Living above retail would be a homerun in that scenario.

  • http://www.millionmyles.com Carson

    It is really sad that the design of these spaces doesn’t work for small business. Maybe they can be converted into mini indoor malls with single entrances. Sounds like a flea market. I think that office space makes the most sense. And office mall. And, you can landscape a lot of that extra parking space. If it doesn’t work for retail quit treating it like retail. I was also thinking warehouse/distribution. That or indoor paintball. Lazertag?

    • http://card.ly/laniar Lani Rosales

      I love your ideas, Carson, especially about making some of the parking green space, or why not park areas? Industrial would be a great replacement and come to think of it, an old bank in Austin was transformed into a Lazertag arena which it has successfully been for over a decade now. Great input!

  • http://www.move2pennsylvania.com Erica Ramus

    About 5 years ago a local mall asked me to help them fill space. I created a whole presentation on trying to attract “nontrad” tenants and perhaps discounting space to get large volume tenants in that would bring “feet” to the mall, which would increase traffic, which would help current tenants pay their rent, which would … big circle.

    I had ideas to fill the mall with a local library that needed space, a daycare center, a fitness center, a doctor’s office, back end offices. I brought the ideas and some tenants who were interested and one by one the mall management dropped the ball and dragged their feet. THey really wanted REATAIL and didn’t want to go that route so they just ignored nontrad tenants. Now, that mall is a ghost town. Nobody goes there anymore unless it’s a destination to one shop. In and out.

    Another local mall did the opposite. It hired a new local broker to beat the bushes, to work WITH them not against them. I helped bring a local community college in to their mall, and they were successful in filling other spaces with some retail, some nontrad, including a surgery center! Think about it: plenty of parking, easy to get to, etc. Why not?

    If mall management does NOT change their thinking and repurpose many malls will become ghost towns.

    • http://card.ly/laniar Lani Rosales

      Erica, you hit on an important note above- the medical sector is and has been growing, big boxes that die are PERFECT to be repurposed for that, why not? Also you noted that management digs in their heels… it is VERY rare for management companies to think creatively, there is typically a list of acceptable tenants (and that list looks like their existing tenant roster). It’s a shame, really.

      • http://www.move2pennsylvania.com Erica Ramus

        That’s exactly what happened. They wanted me to find similar retail tenants and restaurants to add to the mix, not create a new niche.

        I also don’t see the outdoor mall/lifestyle center thriving here in the Northeast, with our 5-6 months of cold weather.

        One successful trend has been taking malls with 4 entrances only, and busting through the exterior to open them up to outside traffic, so people can run in and out quickly (video store… etc) and not walk the whole mall to get to 1 shop in the middle.

  • http://www.livingtwincities.com Jason Sandquist

    We have a few here around Minneapolis – St. Paul. One is newly built mall that is already REO, it is an outdoor mall and whoever gave the green light on that one is probably in the unemployment line being that the Twin Cities just doesn’t have the year round weather to support it.

    Another is a mall that has been on the auction block a few times that has just struggled for the past 15 plus years to keep major tenants, blighted area et al. The only reason why I bring this one up is because I just saw an article on it today stating that Wal-Mart wants to try and move in again. They tried that a few years ago and a bunch of the anchor tenants sued them not to move in. Wonder what they are thinking now…

    • http://card.ly/laniar Lani Rosales

      Outdoor in your area? I get how it works here, but there? That’s silly.

      Wal-Mart tried to do the same here (but got a big fat no by activists) and they have new prototypes that are greener and smaller and they are trying to repurpose some spaces (although I haven’t heard of it happening anywhere yet). Wal-Mart isn’t ideal, but it’s better than a dead mall virus.

      • http://agentgenius.com Benn Rosales

        This is exactly what’s happening at north cross, they repurposed some percentage of the original mall, leveled the rest, and now will stand a chic looking urban walmart about the footprint of a small jcpenny or sears freestanding. Cool thing with those smaller freestanding units, they’re a little more square and harder to recognize when they close down leaving a somewhat desirable spot for other ventures unlike recognizable structures like target and large walmarts.

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  • http://AnnArborRealEstateTalk.com Missy

    We had a not quite dead mall in Ann Arbor a few years ago. Shabby…ugly etc. Finally a new developer bought it and completely remodeled it. Stuck a Toys R Us in there, Starbucks, Marshall and smaller boutique shops and it is now doing well.
    Great location between U of M and EMU.

    I go over there, for Marshall’s and Michaels and to take the dogs (all 4 of them) to get haircuts.

    • http://card.ly/laniar Lani Rosales

      Missy, I’m curious how residential and commercial performed in that area around the mall before it was revived, any impact?

  • http://www.livingtwincities.com Jason Sandquist

    maybe they should all be turned into skate parks :-)

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  • http://AnnArborRealEstateTalk.com Missy

    Their was no issue in housing or commercial. It has it’s own flavor on the East side. Always crowded and unique businesses are right there.

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  • Bobbie Fenton

    Why has no one thought to turn these into indoor cities???? Residential/retail space where some small businesses like coffee shops and pharmacies, spas, theaters and exercise clubs could live hand in hand with upscale condos! This would be fabulous!! I can think of some absolutely really cool things that could be done to turn one of these things into a residential/commercial space that would be fantastic!!!

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