Revolutionizing the Classic American Mall Experience
The iconic American mall is undergoing a dramatic transformation, and it’s not just about shopping anymore. Developers are swapping out dying department stores for apartments, paving the way for a new era of living at the mall.
A New Era of Mixed-Use Development
Some developers are knocking down department stores like Macy’s or JCPenney and building apartment complexes next to the mall or connecting them via walkways and green spaces. Others are repurposing shuttered storefronts and shopping center properties to create a mix of housing, retail, restaurants, outdoor spaces, and experiences.
The Mall is Becoming Cool Again
According to Jacob Knudsen, vice president of development for Macerich, “The mall is becoming cool again… So being able to live by it, work by it, play by it, go to restaurants by it, we’re definitely seeing this as a trend.” This shift comes as shopping centers across the country fight for survival and look to transformation to avoid extinction.
From Retail to Residences
As consumers increasingly prefer online shopping, traditional anchor department stores are in decline. To repurpose these spaces, developers are getting creative. Amazon distribution centers, pickleball courts, and even an NHL training facility have replaced big-box stores at American malls. However, the fastest-growing use of these spaces is apartment complexes.
A Growing Trend
At least 192 U.S. malls planned to add housing to their footprint as of January 2022, with at least 33 having constructed apartments since the pandemic began. Dozens more apartment projects are underway at malls across the country, including in California, Florida, Arizona, and Texas.
Challenges and Opportunities
While living at the mall offers a unique experience, it comes with challenges and hurdles. Construction costs are high, and developers need to navigate zoning laws and antiquated lease agreements. However, adding apartments can bring people closer to remaining retail stores and restaurants, creating a built-in customer base.
Pioneering Projects
The Lafayette Square Mall in Indianapolis is slated to open 1,200 apartment units, including affordable housing in a former Sears building, beginning in 2025. The Paradise Valley Mall in Phoenix just opened up 400 luxury units. Other pioneering projects include The Arcade in Providence, Rhode Island, and the Grand Avenue Mall in Milwaukee, Wisconsin, which have successfully transformed into mixed-use developments.
Residents Embrace the Convenience
Tenants in these developments rave about the convenience and unique experience of living at the mall. Amy Henion, a 33-year-old graphic designer, loves being part of a historic building and having access to amenities like hair salons and restaurants. Scott Sheehan, a 31-year-old tax advisor and real estate investor, purchased an apartment inside The Arcade to rent out on Airbnb, citing its proximity to the train station, airport, and major employers.
A Seamless Living Experience
Najla Kayyem, Pacific Retail’s executive vice president of marketing, envisions a future where living at the mall is akin to vacationing at a resort, with everything charged to one account using a centralized system. While it may take years to get there, the possibilities are endless for this new era of mixed-use development.
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