In June, Washington Prime Group agreed to turn a former Sears location at its Morgantown Mall into a logistics, distribution and fulfillment center for WVU Medicine, the health care network serving West Virginia University. The move comes after Washington Prime’s recently announced Fulventory initiative, through which the company is providing logistics and warehouse solutions at its properties.
“As more department stores become vacant, we do need to re-envision the future of mall properties,” said Greg Maloney, president and chief executive of the Americas retail unit of Jones Lang LaSalle. “Will it be 100 percent retail? No, but its success still comes down to location.”
Long before the coronavirus arrived in the United States, many malls, often overburdened with debt and struggling with vacancy and declining values, were fighting to stay alive.
The number of malls has declined to less than 1,000 today from 3,000 at the turn of the century, according to Nick Egelanian, president of SiteWorks, a shopping center and retail consultant in Annapolis, Md. And, he predicts, only about 200 of the strongest malls with the best locations will be left by the end of the decade, if not sooner.
But to thrive, most must adapt, said Mr. Egelanian, who has long argued that the deconstruction of department stores — and therefore malls — began 40 years ago with the dawn of big-box stores, or “category killers.”
“The true mall of the future will incorporate a mix of uses,” he said, “and the retail will be downsized: If it has 2 million square feet today, it may only need 1 million square feet tomorrow. But it’s going to be painful getting there, and the ones that survive are going to need a lot of capital.”
The ideal, he said, will mirror properties like Tysons Corner Center, a 1.9-million-square-foot mall in Virginia owned by Macerich that is surrounded by offices, high-rise residences and hotels.