Malls giving way to hot retail and restaurant concepts in urban mixed-use locations with strong walkability are driving the decline of malls, according to North American Properties. The firm presents evidence in the form of Avalon in Alpharetta, Georgia. However, Taubman Centers Inc. offers something rarely seen in retail these days: a new regional mall. Taubman is scheduled to open the 900,000-square foot Mall at University Town Center in Sarasota, Florida.
Avalon attracted more than 10 first-to-market retailers and restaurants, such as Kendra Scott, Soft Surroundings, Lou & Grey and The El Felix. Major retailers, such as Gap, J. Crew and Banana Republic, are locating to the $600 million mixed-use development opening in October.
“Nationally, consumers are shifting away from traditional malls and seeking a new experience,” said Mark Toro, managing partner at NAP. “As a developer, it’s important to create a sense of community and offer a property with a walkable design that infuses hospitality into every aspect. This is what the new class of consumer is demanding, and retailers are listening.”
Only eight new malls have been built in the United States since 2008, according to Green Street Advisors. New development has slowed down recently, falling from more than 25 million square feet of gross leasable space added in 2001, to less than four million each year starting in 2010. NAP connects the rise of more than 80 million 18- to 35-year-olds of the Gen Y population to the more than 400 malls that were repurposed or closed outright in the last decade, according to GlobeSt.com. Taubman hopes to change that with its mall anchored by a Dillard’s and a Saks Fifth Avenue, which cost Taubman and its partners $315 million to build.
Taubman, a real-estate investment trust based in Michigan, currently has three domestic projects under way in Sarasota, Hawaii and Puerto Rico, with a combined cost of $905 million to the company. Taubman has two malls planned for China and one for South Korea, with a combined cost of $560 million. Taubman believes its projects are located in markets that are underserved by retail. Because of its track record of attracting high-quality tenants, the Sarasota mall will fill the void between Tampa and Naples for upscale, destination retail, the company said. According to Taubman, the mall’s retail space was 90 percent committed months before the opening.