Moderated by Rick Badie
The struggles of some shopping malls here (such as Gwinnett Place in Duluth and Southlake in Morrow) and across the nation have been well-documented. Shopping centers can struggle financially when demographics change, anchor stores pack up and move, specialty shops lack appeal or spending patterns reflect a dull economy. Today, a mall real estate specialist and a local revitalization executive weigh the challenges and the future facing these retail destinations.
By Michael P. Glimcher
The death of the mall has been proclaimed over and over. Many thought it couldn’t weather the recession or would crumble from online retail. However, to say the mall will die is to underestimate that consumers are resilient, the mall is adaptable and people love to shop.
Malls remain highly-valued fortress-like assets. Mall real estate investment trusts are able to draw equity from top institutional investors attracted to stable cash flows from long-term leases that often average more than seven years.
Regardless of economics, the recession changed how we shop. As consumers tightened belts, we saw the rise of “fast fashion.” Retailers, like Forever 21 and Old Navy became household names. The industry also ushered in the outlet era. Well-known outlet brands increased their stores and full-price retailers re-evaluated strategies.
Today, with so many economic and political uncertainties, we can expect to see the popularity of value retail continue and to see “fast fashion” expand into categories like home décor. We will also see the pace of outlet growth continue short-term, and outlet and full-price retail exist closer together.
The recession has changed how people enjoy the mall. During the recession, Americans invented the “staycation.” Consumers traded in luxurious vacations for frugal experiences closer to home, like shopping, dining and movies. As a result, malls have seen dramatic increases in the number of restaurants as well as other entertainment venues like movie theaters, skating rinks or comedy clubs, set up shop.
More experiences are also being added. With the rise of online shopping, retailers are finding new ways to engage shoppers with brands. For example, lululemon athletica has introduced free yoga classes and Nike coordinates running clubs. Stores like Williams-Sonoma and Pottery Barn offer classes that integrate their products.
At Glimcher Realty Trust, we use the term” experience retail” to describe anything you can do at the mall but can’t do online. You can’t have a salad and a glass of wine online. You can’t try on a purse or have your makeup done. Shopping is a tactile and social experience.
Looking forward at the success of the U.S. shopping mall, some of the basic tenets of commercial real estate remain. First and foremost, it’s about location. Highway traffic, accessibility and proximity to dense residential areas are some of the leading factors in a mall’s longevity.
Reinvestment is also critical. Because of their size, in many cases more than one million square feet, malls require tremendous maintenance and upkeep. While renovations and updates can be costly, they are important to maintain the quality of the center and to attract and retain top national brands coveted by shoppers. Clean aesthetics with modern amenities add to the allure of the shopping experience.
Finally, with limited non-outlet mall development and retailers well-schooled to survive in this economy, it’s safe to say the mall isn’t going anywhere. It just might look a little different.
Michael P. Glimcher is chairman and CEO of Glimcher Realty Trust.
By Leo Wiener
On Aug. 28, the Gwinnett County Board of Commissioners took a bold step and endorsed a vision for the Greater Gwinnett Place area.
For the past year, the Gwinnett Place Community Improvement District (CID) has worked with Gwinnett County, the Gwinnett Chamber of Commerce, stakeholders and concerned citizens to craft strategies that can dramatically transform greater Gwinnett Place into a vibrant mixed-use center.
Launched in partnership with Gwinnett County and the Atlanta Regional Commission, the Gwinnett Livable Centers Initiative (LCI) is a map that will create a new type of community in Gwinnett’s central business district. Successful implementation of this plan will require a public-private partnership. The LCI process helped stakeholders understand that doing nothing or maintaining status quo would lead to failure. Gwinnett Place must continually evolve and remake itself if it is to be competitive again.
To achieve this vision, the plan recommends strategies such as opportunity zones and tax allocation districts. The plan calls for the revision of local land-use policies and regulations and infrastructure investments aimed at creating a more walkable development. Central to this strategy is the creation of what has been called the Great Lawn, a public gathering place that can provide an outdoor venue for gatherings, art, entertainment and recreation. This would be a central green space or public park that will span both sides of Pleasant Hill Road.
The LCI concept master plan also presents two options for the future redevelopment of Gwinnett Place Mall. One option envisions the structure remaining intact with a complete redesign of the mall facade, the addition of parking decks and office buildings and residential developments, similar to improvements made at Perimeter and Cumberland malls.
The second option calls for the redevelopment of the mall by removing the roof and running a grid of streets through the mall’s center. Anchor stores Macy’s, Belk, Mega Mart, JC Penney and Sears would be converted to free-standing structures. This long-term option would create a true walkable urban core similar to Atlantic Station for downtown Atlanta.
It is important to know the rebirth of the area is no longer completely tied to the success or failure of the mall. Over the last decade, greater Gwinnett Place has begun to evolve while its mall declined. The area has shown the vibrancy needed to initiate a transformation and rebirth regardless of the mall. This transformation has been evident over the past few years with the renovation of existing retail centers and investment in new development. With or without a revitalized mall, the Gwinnett Place area continues to be a vibrant marketplace of distinct cultures and experiences.
Greater Gwinnett Place’s strategic location in the heart of the region’s most vibrant community has much of the amenities, infrastructure, and transportation needed to complement the area’s rebirth. Even greater transformation is possible, ahead of any rebirth of the mall.
Leo Wiener is chairman of the Gwinnett Place Community Improvement District.