Malls present interesting challenges to those who invest in commercial property. When they do well, they do very well. Yet when consumerism and market demand change, malls can be left with empty spaces, reducing the profitability of the property. Those involved in commercial real estate may need to take creative measures to keep their spaces filled. Thankfully, there seems to be no limit to what vacant stores in malls can be used for today.
Entertainment and Activity Spaces
When a downturn in the market may be temporary, some mall owners turn to leasing space for seasonal entertainment attractions and events, such as haunted houses and holiday displays. In locations frequented by millennials, sports bars, pubs, and other trendy eating and activity establishments tend to do well. If there is not one in the mall already, a movie theater is a great draw that can keep larger spaces in these types of commercial property producing income.
Medical and Professional Spaces
In suburban locations, retail commercial real estate can be repurposed as facilities for medical centers and labs or converted into office space. Some investors have had success leasing to data centers that require large open spaces. Depending upon location and accessibility, some retail locations can be turned into charter school facilities.
Combined Retail and Market Spaces
Although malls traditionally offer retail establishments other than grocery stores, some locations do well by leasing out larger spaces to popular grocery chains. Although mall supermarkets are a newer idea, they are becoming more popular in urban areas as more people seek a one-stop option for all their retail, dining, entertainment, and grocery needs.
Hotels, Resorts, and Apartments
More empty or low-profit malls are being converted into lodging. These commercial real estate spaces are becoming more desirable and profitable since they are suitable for conversion into hotels, casinos, luxury resorts, and even small apartments. Some former malls that have been repurposed as small apartments have long waiting lists as people looking for low-cost, yet attractive housing are eagerly jumping on the bandwagon.
Other Creative Ideas
In addition to the above ideas, mall commercial property can be more profitable by bringing in specialty stores that are new to the area, turning available space into TV studios, or looking for retailers that better fit the current market climate. As product demand and local audiences change, so does the demand for different retailers.
No one who owns commercial real estate such as a mall likes seeing empty space that will decrease their investment returns. Fortunately, owners who are willing to expand their vision a bit can have opportunities to put the empty space to good, income-producing use. Based on the location, local demographics, and what types of businesses the area needs, mall owners can still excel with mall commercial property. It simply requires a bit of bending to fit the current demand for space and a little creativity!