CENTURY 21 Commercial Newsletter December 2020
Ideas for Repurposing Vacant Retail Malls
Experts say that the coronavirus pandemic has accelerated trends that were already taking place in the real estate industry. The retail market was already facing challenges from e-commerce before COVID-19, and the phenomenal increase in online shopping due to COVID-19 has further stressed the sector, causing a wave of store closings. According to a recent report by the National Association of REALTORS®, 9,350 stores were closed in 2019, and another 2,021 have been shuttered as of April 2020. But what’s to come of the vacant malls left behind?
These malls contribute to urban decay and reduce property values. But adaptive reuse of these vacant properties allows them to be repurposed. Here’s what NAR discovered when it looked into new uses for vacant malls, conducting both a survey and additional research.
The most common new use for vacant malls was for new retail – new stores to replace those that closed, popups or new anchor tenants. Mixed use and warehouse space were the other top choices for new uses.
On average, vacant malls sold at a discount of 43%, with an average price per square foot of $80.
How were these deals financed? Major sources of financing included retail REITs, private investors, local banks and regional commercial banks.
