Repurposing Retail Shopping Centers

Over the last couple of years, large retail centers have been significantly impacted by the ongoing pandemic and the rise in popularity of ecommerce. Before the rise of e-commerce, when someone wanted to shop for a variety of items, shopping malls were consumer hubs where people could shop at a wide variety of stores. Today, those same shoppers can log onto a single website, fill their digital shopping cart with various types of items, and wait for them to be delivered. Not only have these factors negatively impacted retailers nationwide, but they have also damaged those who are vested in retail centers. For owners and investors of shopping centers, knowing how to repurpose these retail centers into multi-use facilities is paramount for their own financial success.

Repurposing Malls

According to a study from, a record 12,200 stores closed in 2020. These closures were largely caused by the ongoing COVID-19 pandemic and the continued expansion of ecommerce. With so many closures, the impact on real estate developers was both inevitable and disastrous. Another study, which was published by CNBC in 2020 indicates that 25% of malls in the United States are slated to close their doors forever by the year 2025.

To reduce the likelihood of becoming another statistic, savvy owners and retail investors have started repurposing their massive vacant spaces through a process called “adaptive reuse.” While traditional retail has been forever changed, other industries are starting to experience the need for large spaces, which they can easily find in large retail centers. It is common today to walk in a retail shopping center in the U.S. and find distribution centers, offices, business centers, medical offices, and even life science, residential, and mixed-use facilities in large retail shopping centers.

As more variants of the COVID-19 virus continue to derail economic recovery, and ecommerce continues to be the preferred shopping option for millions of people around the US, it will become even more important for owners and investors alike to adapt. Failure to do so puts their retail centers at risk of becoming another statistic.

Understanding Your Options

If you own a retail shopping center, it is important that you understand all options available to you. One of the most effective ways to protect one of these centers from the risk of closing is to view ecommerce as an opportunity instead of viewing it as an opponent. As ecommerce companies continue to expand their operations, it is important to note that they will need distribution and pick-up centers all around the country. If you have vacant spaces in your retail center, consider working with the e-commerce companies who are in high demand for spaces exactly like these.

The prevalence of the COVID-19 pandemic has also put an increased focus on healthcare. As more people started seeking viral testing and needed healthcare quickly, many clinics started popping up in shopping centers. This was largely caused by the fact that outpatient clinics were not capable of meeting the demands, as millions of people needed testing and care for the virus. This created an entirely new clientele for shopping center owners who had vacancies in their facilities and access to easily accessible spaces, perfect for the aging population’s medical needs.

Finally, many developers have also tapped into the residential market. While incorporating residential options into retail centers is a relatively new idea, it has been quickly gaining traction in different areas of the country. With a rise in popularity for these types of developments, investors have realized that they could create campus-like amenities that combine living spaces, dining, medical offices, and retail stores within an individual location. Since most malls are in prime locations and have ample parking lots, they can combine these perks to attract new tenants, creating a solution where everyone benefits. Property owners are now able to recover a substantial portion of the revenue that they have lost in the decline of traditional retail facilities, while tenants are able to take advantage of well-positioned, large spaces that offer everything that they need in one location.

Understanding how to adapt your existing real estate investments to survive in an ever-changing economy is vital. While traditional retail may never return to the levels of popularity that it once enjoyed, there are still ways for real estate owners and investors who specialize in shopping centers to rethink and redevelop their spaces.

If you think that repurposing and redeveloping your shopping center is the right choice for you, it is crucial that you work with a company who can not only help with the conceptual design and underwriting, but also take the project through completion and ensure you are profitable upon re-opening of the center. SCGWest has over a decade of experience perfecting their proprietary process and turn-key approach to both end users and investors who are redeveloping shopping centers or single tenant buildings, to see our previous work click here!

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