Tastes have changed shopping trends
Some malls in the U.S. are finding their balance
DAYTON, OHIO—Malls in the Dayton area have fewer empty storefronts compared to their peers in other cities.
A new report shows that regional shopping centres in te other U.S. metros are struggling to stay relevant in the era of online shopping, changing tastes and an overabundance of retail competition, leaving the malls struggling to fill the shells of empty department stores.
But Dayton Mall and the Mall at Fairfield Commons have so far been weathering the storm. The two malls are astoundingly 95 per cent occupied. The region’s outdoor malls also are retaining and replacing stores.
The national mall vacancy rate reached 8.6 per cent last quarter, up 0.2 per cent from the beginning of 2018, according to a study by real estate research firm Reis. The rate is higher than it has been since 2012 when retail was still recovering from the recession.
The high vacancy rates come as retailers look to adjust to a shifting industry, where online giant Amazon has changed the traditional business model. In the past year, several large box-stores, such as Toys “R” Us and Bon-Ton, have closed stores or been forced into bankruptcy.
“There’s no question that retail leasing has headwind right now and it has a lot to do with the Amazon effect. Retailers are
g to figure out what the future holds right now,” said Larry Dillin, president of VisCap Development and property manager and developer for Austin Landing. “Values of retail properties are down compared to what they were a year ago.”
But mall officials in the Dayton area said vacancy rates aren’t as high as the national average.
The Mall at Fairfield Commons in Beavercreek is nearly 95 per cent leased, said Kristie Miller, regional vice-president of property management for the mall’s parent company, Washington Prime Group. With a vacancy rate of about 5 per cent, the shopping centre with more than 100 national and local tenants is doing about 2.5 per cent better than national average.
“The Mall at Fairfield Commons continues to offer guests the right mix of retail, dining, entertainment and events,” Miller said.
Mixed-use of facilities has been a recent trend for malls looking to keep up as the retail industry experiences a shift due to growing online competition. Open-air shopping centres are doing better than traditional malls in the retail industry because they are mostly designed to offer experiential shopping in a mixed-use setting.
“It comes down to experiences, where before we were looking at efficiency. That’s where the mall concept came from — go to one place for everything,” said Cheryl Dillin, spokesperson for VisCap Development. “Now we’re learning that it’s a little bit more experiential that people want.”