Revival is Afoot at the Nation’s Regional Malls
The malls of yesteryear are not dead, but many are in need of a revival if they want to thrive tomorrow and beyond, believes Leslie Lundin, co-founder and managing partner at LBG Real Estate Cos. Lundin, who held the “Transforming Challenges into Opportunities” workshop on Monday at ICSC’s Western Dealmaking Conference at the Los Angeles Convention Center, asserts that many mall properties are situated in prime traffic corridors — meaning the traffic is there but it’s up to the owner to take advantage of these numbers.
She points to the Shops at Hilltop, a 1.2-million-square-foot shopping center in the San Francisco East Bay submarket of Richmond, as one example. LBG acquired the asset, which is currently undergoing a rebranding and re-tenanting just off Interstate 80 in a dense traffic corridor that sits 20 miles northeast of San Francisco, in July 2017. It is set to become an Asian-themed shopping and entertainment destination that includes a movie theater, live theater, grocery store, food hall, and more than 100,000 square feet of restaurants along with various entertainment-related tenants. The Shops at Hilltop will also include off-price, valued-based tenants such as H&M, Forever 21 and Saks Off Fifth.
Rich Walter, executive vice president of SRS’s Investment Properties Group and conference attendee, believes the addition of new tenants to a center like the Shops at Hilltop can enhance not only the property, but benefit existing retailers as well.
“Creating synergies between the current tenants and new elements to the center will greatly benefit the owners and ensure success,” he says. “Shoppers want to be in an updated environment, where there was a thoughtful approach to selecting the tenants — synergy between the make-up of the center and the surrounding demographic. Shopping center owners need to respond to several questions: what do people want? what do people need? and where is the trend heading?”
The Shops at Hilltop is situated in an area known as Hilltop by The Bay. It is zoned for up to 16.7 million square feet of occupied building area, with potential retail, office, hotel and residential uses. Lundin and her team are also taking a five-pronged approach to anticipating changes in the market that may affect the surrounding shopping demographic, which has a heavy Asian population.
“You have to redefine retail and look at traditional urban models, while revisiting the Main Street concept,” she says. “You have to curate the experience, and you have to localize it. Most of all, you have to make it fun, make it real and make it personal.”
Part of the personalization of the Shops at Hilltop is adding Asian tenants. The center is situated within a residential trade area that boasts more than 1.2 million permanent residents in 483,000 households with an ever-growing population, particularly among the Asian demographic. LBG is catering to their preferences by adding ethnic food tenants like Daiso Japan, Q-Pot Korean barbecue and hot pot, 99 Ranch Market, Fusion Bistro and more.
Glenn R. Rudy, conference attendee and senior managing director of NKF Capital Markets, also believes it’s crucial for owners to keep the customer at the forefront of their minds nowadays, as the old way of doing business isn’t necessarily effective anymore, thanks to e-commerce.
“The days of ‘build it and they will come’ is not how it works anymore today,” he says. “Now, the mantra is ‘build an inviting, pleasurable environment providing a high-quality experience and they will come —and they will stay.”
— By Nellie Day, contributing writer
This article is part of the Retail Insight newsletter by Shopping Center Business, which includes a brief series of articles and videos surrounding some of the retail industry’s biggest gatherings, including ICSC Western Conference & Dealmaking. Some of the articles and the videos in the publication are created in conjunction with our content partners, which sponsor the newsletter. Click here to subscribe and to see archived newsletters.