75°F
weather icon Clear

Shopping malls not dead, just changing

Experts in retail commercial real estate don’t deny that change is arriving and casualties of e-commerce are a reality. But shopping malls, including Las Vegas, could adapt to become successful, according to these same real estate pros.

“I think that the overarching challenge in this business is recognition for the fact that we have an imbalance between supply and demand,” said Michael Powers, director of retail at a large-scale, mixed-use project in New Hampshire named Tuscan Village. “Consumer behavior has changed radically while the supply of retail has been reluctant to change.”

Powers was one of 37,000 retail commercial real estate pros that made it out to the International Council of Shopping Centers’ RECon expo, which rolled through Las Vegas in the second half of May. Powers represented a booth dedicated to a roughly 2.57 million square-foot, mixed-use project in Salem, New Hampshire.

Powers said that some retail venues today are filled with tenants that are sometimes no longer relevant, which is a limitation to success.

“To be successful in the programming of existing and new mixed-use venues, you really have to recognize that imbalance in programming,” he said.

He said most department stores devote a little more than 50 percent to apparel, shoes and accessories.

“If you ask your typical millennial shopper if they had a dollar how would they allocate it, they wouldn’t spend 50 percent on apparel shoes and accessories,” Powers said.

What millennials would spend money on carries a lot of ideas and research, Powers said.

“Fundamentally, you have to create an environment that’s worthy of the social media transaction,” he said.

Would an individual want to take a photo of themselves and post it is the standard, he said. Though even that concept can have a lot of different meanings and change with common areas, entertainment space and in and other areas in a shopping mall or mixed-use center.

“All of that is important from a landlord perspective to be successful,” Powers said.

Overall, a development must stay focused on the consumer in the local area.

“It’s very market-based,” he said.

Powers said he is deploying these methods at the Tuscan Village.

“We are bound and determined to have a balance of retail and non-retail that’s appropriate, that will complement each other and will drive the success going forward” he said.

Powers did add that some areas have too much retail.

According to a fourth-quarter 2017 report by Cushman & Wakefield, there were roughly 1,150 malls in the U.S., down from 1,350 a decade earlier.

Powers said a more appropriate number of malls would be closer to 800 to 900.

According to a 2017 report from Credit Suisse, its predicted that 25 percent of the current stockpile of malls in the U.S. were on a trajectory to close by 2022. The report came in the wake of thousands of brick-and-mortar retail stores closing or heading into bankruptcy.

In Cushman’s fourth-quarter report, it was estimated that some 9,000 major chain retail stores were shuttered in 2017 and more closures were expected through 2018.

Philip Knott, general manager of Tivoli Village, also sees retail’s current trend and is deploying different strategies at the lifestyle center at South Rampart Boulevard and Alta Drive.

Knott, who attended the RECon expo, said that many new concepts in the experiential realm were at the May conference with national and international groups displaying their wares.

“From our perspective, we’re focusing on more of that experiential and community feel that a center should be,” Knott said. “I think you start to see across the board, a lot trying to engage the community to come in.”

Knott said that many people seeking items online decide to come to malls and lifestyle centers such as Tivoli for reasons other than to buy products accessible via the internet.

“We’re finding that the people in the community are looking for places to meet,” he said. “They’re looking for things that have meaning. They want it to be a great experience.”

The center holds a range of events to engage the community such as Symphony Under the Stars, put on by the Las Vegas Philharmonic, and other things such as jazz night, with much more going on at the center on a daily basis.

Knott said he is looking for Tivoli to be defined differently than the typical shopping centers in the valley.

“I think offering unique experiences, offering unique retail, offering unique opportunities for communities to get together is really where we live,” Knott said.

Tivoli focuses on several core elements with its tenants: food and beverage, wellness and fitness, home decor and entertainment. Tivoli is now past its development stage, and the center’s operators are focusing on leasing efforts, according to Knott.

The center, overall, is doing very well, according to Knott. Tivoli’s office space is pegged to see a positive flow this year.

Knott said he is looking to lease between 30,000 and 60,000 square feet of office space in 2018.

Don't miss the big stories. Like us on Facebook.
THE LATEST
Former HOA president accused of creating havoc

Nevada Revised Statute 116.31184 addresses threats, harassment and other conduct that is prohibited by this law. The law further clarifies as follows: The action causes harm or serious emotional distress or the reasonable apprehension thereof to that person or creates a hostile environment for that person. A person who violates this provision can be found guilty of a misdemeanor.

Southern Nevada home prices rise; fewer homes sell

A report released Wednesday by Las Vegas Realtors shows local home prices setting another all-time record despite the coronavirus pandemic, though fewer homes sold in August than during the same time last year.

Home + History mix of vitual, live events

The Nevada Preservation Foundation usually holds its annual Home + History tours in April. This year, the events will be a mix of live and virtual activities. Most of the events are sold out. They started on Friday and will continue through Sunday.

HOA board member has a lot of questions

Note: Last week, we left out the names of my column’s guest writers. They are John Leach, Cheri Hauer and Donna Zanetti of the law firm Leach, Kern, Gruchow, Anderson and Song.

Nevada Realtors statement on eviction moratorium extension

This week, Nevada Realtors issued a statement from NVR President Chris Bishop about Nevada Gov. Steve Sisolak’s Aug. 31 announcement that extended the state’s moratorium on evictions for another 45 days beyond the original Sept. 1 expiration date:

How to know if real estate is right for you

Should I go into real estate? Real estate is a unique opportunity. Let’s go back 10 years, when we had the downturn. What was selling? Even with thousands and thousands of foreclosures. People still bought homes and the industry kept going.

Move 4 Less assists HELP of Southern Nevada clients

Seven former homeless adults are sleeping in their own beds in their own apartments. They are clients of HELP of Southern Nevada, who have entered the nonprofit organization’s Hospital to Home housing program. To make their transition from homelessness a reality, Move 4 Less assisted HELP of Southern Nevada by moving new mattresses and frames into the seven client apartments.

New bill limiting COVID-19 liability covers HOAs

During the 32nd Special Legislative Session, the Nevada Legislature passed and the governor signed Senate Bill 4, which limits liability for COVID-19 related claims for most businesses and nonprofits. Initially, the bill did not cover common-interest communities, but thanks to the work of industry groups such as Community Association Institute of Nevada’s Legislative Action Committee (CAI LAC) and the Nevada Association of Community Managers (NACM), SB 4 was amended to include our industry.

REAL ESTATE BRIEFS

CALV to host virtual Commercial Education Day