Obituaries continue to be written about US shopping malls, and that can leave retailers and shoppers in thriving locations walking away shaking their heads. While it’s true that behind-the-times and dilapidated centers will continue to go by the wayside, some malls are still thriving. Take the state of Arizona for example – and we’re not just talking about one huge mall in a tourist spot either, as malls across the state are flourishing.
A good portion of the state’s largest malls are operating near full occupancy levels. That translates into increasing rents, as the malls heavy foot traffic is a huge selling point. So what’s the big attraction in Arizona? Many of the state’s larger malls are ahead of the curve by offering up a broader scope of options at their centers, including entertainment, hotels, mixed-use spaces and offices.
“There seems to be a perception that … regional malls have somehow changed in a negative way in the last few months. It’s not founded in fact.” said Art Coppola, CEO of mall operator Macerich during a conference call with analysts.
Beyond the broader scope, the state is also in the midst of a population boom to the tune of an expected increase in residents of more than 21 percent over the next decade. More residents equal more consumers, and that will naturally lead to an even larger increase in spending in the state.
“Nevada and Arizona will lead the nation with 23 and 21 percent growth in spending, respectively (over the decade), compared to 8 percent for the entire United States,” according to a report from business research group Conference Board.
Macerich is the largest operator of malls in the state, and they closed out 2016 with some unique numbers. Among its signature properties in Arizona is the Biltmore Fashion Park in Phoenix, which checked in at 96.4 percent occupancy, and Kierland Commons in Scottsdale, which boasts an occupancy percentage of 97.6 percent.
So what does that mean for malls that are not located in areas with surging population growth? For starters, you would be surprised how a change in scope can help reinvent an entire area. All across the country, developments are springing up with retail at the core and complemented by a heavy dose of apartments or condominiums, entertainment, restaurants, hotels, and offices. Think live, work and play – all within walking distance. That’s a huge selling point for the younger generations, and developments such as these can lead to little population spike of their own.
