Mispriced and Overly Negative
As online shopping puts brick and mortar retail stores into a tight spot, causing retailers to downsize or go out of business, some might think that buying a mall or a shopping center is not such a great idea. However, not all malls are in difficulty and according to WSJ writer Esther Fung, some private investors see the market as “mispriced” and “overly negative” on mall assets, “creating a buying opportunity.”
In August Fung reported that CBRE Global Investors was buying stakes in three malls from Brookfield Property Partners, which will retain an interest. Brookfield Properties Retail Group is an American real estate investment trust headquartered in Chicago and a subsidiary of Brookfield Property Partners. Its portfolio, according to its website https://www.brookfieldpropertiesretail.com/ includes 162 retail properties in the United States, comprising 146,000,000 feet of gross leasable area.
The Parks Mall, Arlington, TX by Smarty9108 [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)%5D, from Wikimedia Commons
The Parks Mall in Arlington
One of those retail properties is The Parks Mall in Arlington, Texas. The Parks Mall opened in 1988 at 3811 Cooper Street and Interstate 20 in South Arlington, between Fort Worth and Dallas (Wikipedia). According to the Brookfield Properties website, The Parks Mall is in a” highly visible location,” in the “heart of a growing market,” and hosts 22 million visitors annually.
It is clear that despite competition from online shopping, retail sales have continued to grow. Esther Fung’s WSJ article quotes a research note by Green Street Advisors, a real-estate research firm, “The spur in consumer spending has driven better-than-expected tenant sales (not just online), which should continue through 2018.”
Malls for the Future
This WSJ article has spurred me to do a little research and think about what might make a mall continue to be a profitable investment in the future. So I looked at https://www.theparksmallarlington.com/ to get some ideas about what The Parks Mall is doing to survive and thrive as a commercial entity in the future. Its strategies include:
- Make the mall a community with opportunities for parties and skating.
- Expand out of shopping into fun experiences, “learning, playing, and exploring” with activities like Camp Gladiator Fitness Camp that meets in the upper level parking garage.
- Create Santa’s Toy Factory, where you can test and design online toys in Santa’s Workshop on Level 1 in Center Court.
- Offer picture taking opportunities with special days like
- Ugly Sweater Days, November 16 through December 13,
- Holiday Pajama night, that special night when you dress up your whole family in their favorite holiday pajamas and come down to the Mall for pictures, November 30 -December 6.
- Grandparent Day, November 29th; and
- Pet Night every Monday from 5-8 pm.
- Offer Food. Food and more Food. Although you can have food delivered and eat just about anything in front of your computer screen, eating out is still a treat and cannot be done online. The Parks Mall offers Share, Sip, and Dip with snacks, coffee, and full meals to indulge in.
- Offer care of your person with hair and skin boutiques. You can’t get that personal care for your nails, hair, and skin online.
- Keep the movie theatre hopping with snacks, drinks, and the latest films.
Whether you are looking at a large mall or small neighborhood mall, malls still have a role in American community life; and with imagination and marketing, they might just be a low-priced buy for investors interested in remodeling and re-enlivening commercial property in the downtown or suburbs.
Fung, Esther. CBRE Global Investors Buys Stake in Three GGP Malls. The Wall Street Journal, August 27, 2018. Accessed November 27, 2018.
Wikipedia. The Parks Mall at Arlington. Available online at https://en.wikipedia.org/wiki/The_Parks_Mall_at_Arlington. Accessed November 27, 2018.
Brookfield Properties. website https://www.brookfieldpropertiesretail.com/en.html. Accessed November 27, 2018.