Even as retail analysts have been predicting the ongoing decline of bricks and mortar commerce, new shopping malls are continuing to be built across the country, notes a new report for the website The Motley Fool.
The report by analyst Travis Hoium notes: “Construction cranes never seem to leave the mall area as a shopping expansion turns into a hotel, which turns into another retail expansion.”
The report also notes that shopping mall vacancies across the country have leveled off at 9.3 percent, down from 11.1 percent during the Great Recession.
In addition, says the report, while big anchor stores like Sears and JC Penney have closed and left behind large spaces at many shopping centers, a variety of companies, ranging from Nike to Verizon and Microsoft, have set up new, smaller mall locations.
The Motley Fool report comes as the International Council of Shopping Centers has released a study contending that malls continue to play a great role in the “cultural life of their surrounding communities,” providing public space for any number of large-scale events.
The ICSC report, The Future of the Shopping Center Industry, also contends that shopping centers today are “increasingly doubling as distribution centers for online purchases.”
“The trend is tied to efforts on the part of retail chains to leverage their existing real estate portfolios and store personnel to fulfill online orders,” says the report.
“Interestingly” continues the report, “retailers may become more reluctant to shutter stores in second and third-tier centers, where rents are relatively low, because of the enhanced role stores now play in terms of fulfillment.”
Rather than the nation’s shopping malls becoming increasingly vacant and even eventually demolished, the report predicts that such facilities are likely to see more renovation and upgrade work in response to changing retail conditions.
By Garry Boulard