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Updated about 2 months ago on . Most recent reply
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Is online shopping causing the death of Malls - What does that say for Commercial RE?
Take these California Malls ---- Eastmont Mall - Closed (Oakland); Carousel Mall - Closed (San Bernardino); Laguna Hills Mall - Closed (which was featured in BACK TO THE FUTURE); and the Village at Orange - Closed.
The term ADAPTIVE REUSE 2.0 is not a new concept but a new focus. This concept aims at addressing the challenges of what to do with defunct suburban malls and maybe even empty big-box retail store spaces that are in desirable and affordable neighborhoods. With these declining commercial spaces, these communities could be at risk for blight.
If you look around, you will see new retail spaces. A new outlet/outdoor shopping space. But the question remains - what do we need to do with these empty retail spaces?
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Quote from @Chris Mason:
Indoor shopping malls as they existed in the 1990s are dying, but retail is not. It's shifting to a model of a big anchor, a Target or a Costco, and lots of little businesses in that same shopping center.
Anyways, I think @Caleb Brown hit the nail on the head. If the trade value of an old shopping mall is less than the build cost of a new storage space or warehouse, then it doesn't make sense to build a new storage space or warehouse, just buy an old shopping center. I do see lots of self storage and warehouses going up, so my default assumption would be that the old shopping malls do NOT trade for less than build cost, but it's possible that the marketplace is not perfectly efficient.
There would potentially be some weight issues with the 2nd+ floors of some shopping malls, depending on what the potential tenant wants to store in the upstairs unit.
The Hilltop Mall (standard shopping mall, Macys, JC Penny, escalators, if you were alive in the 90s you know), in Richmond CA was purchased in 2021, but the buyers aren't doing any of our brilliant peanut gallery suggestions. They are tearing it down to build a logistics facility. Given it's location not far from the ports of Richmond and Oakland, and that the Chevron oil refinery is nearby as well, some of that is likely be driving the highest and best use assessment.
chris in the deep south they turn the anchor store into a big church..
- Jay Hinrichs
- Podcast Guest on Show #222
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