Shopping malls — the nostalgia-filled symbol of American consumerism — are on the upswing and could see even more improvement in 2022, according to experts.
In a new report today, real estate brokerage firm CBRE predicts that the U.S. retail real estate market overall could experience 10-year highs for leasing and investment activity in the coming year, despite deterrents such as inflation and the ongoing COVID-19 pandemic.
It is forecasting that consumer spending will continue to rise in 2022, fueled by pent-up demand and excess savings from the pandemic. That, coupled with more inbound international travel, is expected to give a boost to brick-and-mortar retailers, especially in gateway markets.
As for the hottest retail spaces, CBRE points out that open-air centers will remain the most in-demand property type in the coming year, along with single-tenant drive-thru sites.
However, the indoor mall has been making positive gains. In its report, CBRE notes, “Despite growing vacancy in lower-classed properties, foot traffic data from Placer.ai suggests an underestimated resilience within regional and super-regional malls.”
Indeed, Placer.ai found that the nation’s shopping malls saw a major influx of consumer traffic on Black Friday last month, with visits to indoor malls up 82.7% from 2020 and visits to indoor malls up 43.8% year-over-year. While those numbers still fell short of 2019 levels, the company noted that malls drew high traffic throughout Black Friday weekend, and even beat their pre-pandemic numbers on Cyber Monday, with traffic up 4.1% in indoor malls and 16.8% in outdoor malls compared with 2019.
Earlier this year, David Simon, chairman, president and CEO of Simon Property Group (the country’s largest mall owner), pushed back at naysayers who declared that malls were dead.
“When I listen to the pundits, they’re throwing the baby out with the bathwater,” Simon told investors in the company’s quarterly conference call. “Read my lips, physical retail is here to stay and people really like to shop in the physical world. So don’t believe everything you hear on TV. We’ve got the evidence.”
Recently, a number of retailers have announced buzzy mall plans. Last month, PacSun debuted its PacSun Kids store concept, starting with a location in the Mall of America in Bloomington, Minn. Meanwhile, Toys ’R’ Us is opening a new flagship store inside the American Dream mall in Bergen County, N.J., just in time for the holidays.