The amount and variety of entertainment offered by retail centers has mushroomed over the past decade, profoundly changing the industry from the perspectives of owners and shoppers alike, notes a new ICSC report.
Entertainment-tenant square footage in malls has grown by nearly 45 percent over the past nine years, and in nonmall (open-air) centers by nearly 70 percent, according to the report, citing data from CoStar Realty.
But this growth has been particularly explosive in certain entertainment categories, even though most entertainment space at retail properties still consists of movie theaters, according to the report, titled Expanding Entertainment Tenants Add Experiences to Shopping Centers (Part I). “Active entertainment” (the definition covers such concepts as escape rooms, indoor rides and laser tag) is the fastest-growing segment, says CoStar. That category grew by nearly 600 percent at nonmall centers and by nearly 451 percent at malls, from the beginning of first-quarter 2010 to the end of first-quarter 2019. The number of escape rooms alone mushroomed from about two dozen at the end of 2014 to upwards of 2,300 through the second quarter of 2018, according to RoomEscapeArtist.com, a website devoted to the genre.
The number of escape rooms mushroomed from about two dozen at the end of 2014 to some 2,300 through the second quarter of 2018
Theater square footage expanded by nearly 46 percent at nonmall centers and by nearly 28 percent at malls, between the beginning of first-quarter 2010 and the end of first-quarter 2019. Square footage given over to arcades, bowling and dining rose by slightly more than 80 percent in nonmall settings and by nearly 143 percent at malls.
Most of the entertainment space at retail centers is occupied by theaters
“As a result of all this activity, more entertainment companies are involved in the industry now than in the 1990s,” the ICSC report observes. “Not only are there more startups (e.g. Two-Bit Circus, GameWorks), but more existing companies have stepped forth with new subsidiaries.”
In the shopping center industry, Part II of the report notes, “entertainment tenants form an essential element as landlords transform their once retail-dominated centers into what [consulting firm] A.T. Kearney has called ‘consumer engagement spaces.’ ”
By Edmund Mander