Mall owners continued to bring nontraditional tenants into their properties in the second quarter, taking over space once occupied by department stores and apparel retailers.
CBL Properties says 24 empty former anchor spaces are either committed to new tenants or else under construction, including eight already open and six that are scheduled to open by year-end. The REIT is adding new uses such as entertainment, value retail, multifamily, hotels, offices and grocery stores to its properties, said CEO Stephen D. Lebovitz on an earnings call.
“Our vision of transforming our properties from traditional enclosed malls to suburban town centers is coming to fruition through the addition of new entertainment uses, such as WhirlyBall, Dave & Buster’s and Main Event; fitness uses such as TruFit and O2 Fitness; and other nontraditional uses, like casinos, office, hotels, grocery and multifamily,” Lebovitz said.
At top Macerich properties, meanwhile, co-working companies, fitness clubs and hotels are lining up for space. “Industrious, which recently opened at Scottsdale [Ariz.] Fashion Square, enjoyed the best opening occupancy level in their history, proof that co-working can thrive in a mall setting,” said Macerich CEO Thomas E. O’Hern on an earnings call.
The Void at CityWalk, in Dubai, United Arab Emirates
Entertainment users, too, continue to expand in the Macerich portfolio, O’Hern said. “Demand for quality space comes from tenants like Round One, Pinstripes, The Void [and] Rec Room, as well as increasing demand for presence in our centers by theater operators, including Harkins, AMC and Alamo Drafthouse.”
Unibail-Rodamco-Westfield, for its part, announced a deal to open 25 permanent locations, totaling about 215,000 square feet, at its malls in the U.S. and in Europe for The Void, an immersive virtual-reality concept already drawing crowds at Mall of America, in Edina, Minn.; Santa Monica (Calif.) Place; and other locations.
Legoland recently opened an outpost at PREIT’s Plymouth Meeting (Pa.) Mall, and the REIT is collaborating with apartment developers on possible deals, says PREIT Chief Executive Joseph F. Coradino. “The opportunity to add multifamily units throughout our Philly and D.C. portfolios," Coradino said, "continues to strengthen as we move towards entitlements.”
By Brannon Boswell