The state of the retail industry today is built on the idea that the mall is changing. Many of the major shopping mall property owners, including Simon Property Group, Brookfield Properties Retail, Westfield and Macerich, are using these changes to their advantage. Macerich is experimenting with co-working spaces at select shopping malls. Brookfield Properties Retail is doubling down on energy reduction efforts.
The ICSC, International Council of Shopping Centers, tracks the status of retail and shopping center industries as part of their research arm. In their 2019 Q1 report, the ICSC found that neighborhood, community and strip centers saw 5 million square feet of space absorption in the first three months of the year. The report also found that “power centers” saw a net loss in retail absorption, but only by 316,000 square feet. On the bright side, though, they found net asking rents rose by 1.5% in the first quarter.
This year, the ICSC also found that more retailers are set to open stores than close them. This casts doubt on the notion of a “retail apocalypse,” though experts do still note that challenges exist for brick-and-mortar.
Overall, the status of the retail industry today is experimentation. There is a renewed openness to different ways of doing business. Avenues of exploration include everything from on-the-ground efforts like building system retrofits that can unlock energy savings and new lease agreements that are more favorable for both property owner and tenant to exploring new kinds of tenants like co-working spaces in malls and healthcare facilities in retail spaces.
For more on the retail industry and how a Master Systems Integrator can help energy managers and portfolio owners address the challenges of the retail industry today, download our e-book "How an MSI Can Help Your Retail Portfolio Thrive."
Continue following our "Retail Industry: From Retail Apocalypse to Smart Malls, How Energy Managers Can Prepare for the Future of Shopping Malls" blog series: