Malls are making a shocking comeback becoming the top performer in commercial real estate
Zombie malls are having the last laugh.After a decade of doom-loop headlines, Instagram-video obituaries and dead-mall photo essays, America’s shopping centers just posted the hottest numbers in commercial real estate.Mall values shot up 13% in the past year, according to real-estate research firm Green Street, crushing every other property sector and doubling the pace of the broader commercial market’s recovery.The comeback isn’t just Wall Street math.It’s Gen Z dragging their moms to the food court, luxury brands moving into old Sears boxes and landlords finally figuring out that a mall without a movie theater or a Din Tai Fung is just a warehouse with parking.“In terms of how we think about the malls today fundamentally, this is probably the best it’s felt post-COVID,” Ronald Kamdem, who heads US REIT and commercial real-estate research at Morgan Stanley, told the Wall Street Journal.
It’s a wild reversal from five years ago, when lockdowns gutted foot traffic and department-store closures were already bleeding malls dry.Roughly 200 malls have shuttered nationwide since 2008, Green Street data shows, leaving about 900 still standing.And the survivors left standing aren’t just surviving, they’re becoming tourist attractions in their own right.As for the top five, based on foot-traffic alone, they’re booming.Minnesota’s Mall of America pulls in a jaw-dropping 40 million visitors a year to browse its 500-plus stores and 50-plus restaurants.
New Jersey’s American Dream matches that same 40-million-visitor number thanks to an indoor ski slope and DreamWorks Water Park, one of the largest indoor water parks in North America, alongside more than 300 retail stores.Houston’s the Galleria draws upward of 30 million shoppers a year, many of them lured by its center-court ice skating rink and more than 400 stores.
Pennsylvania’s King of Prussia Mall, home to one of the country’s deepest luxury retail lineups across 450-plus stores, pulls ab...