According to Credit Suisse, there are more than 1,100 shopping malls in the United States today, but a quarter of them are at risk for closing in the next five years.
While increased online sales undoubtedly play a role, Mark Cohen, director of retail studies and adjunct professor with Columbia Business School, is convinced there's another trend to blame. "The mall used to be the place where young people - religiously and faithfully, and reliably and constantly - hung out to be with their friends," said Cohen. "That community is now in competition with social media where, in fact, a lot of people are congregating."
The concept of shopping malls was developed in the 1960s, and flourished in the 70s and 80s as suburbia grew with the Interstate highway system. Many communities are working with developers to create "lifestyle centers" where people can live, work and play in one space. Also called town centers in many developments, they're intended to emulate what was lost in parts of America as shopping malls were built.
Across the country, Cohen said communities of all sizes can't ignore the viability of their mall spaces. "There's going to be a full-hearted attempt to redevelop these spaces as they move their viability as shopping centers," he explained. "A few will become lifestyle centers and they will expand their entertainment core. But the original thesis of a shopping center destination - with large anchor tenants as department stores, populated with specialty stores - just isn't going to work for them in the future."
He added it's up to communities to get creative in utilizing the space. "The only alternative communities have is to work aggressively with the owners of the malls that are failing in their community to try to redevelop the space," he said. "Whether it's educational institutions, nursing homes, financial centers, hospital centers. There's a deadly spiral that occurs once these malls start going dark."
In some communities, local governments are using the properties to build conference centers or house office space for city services. Other cities with a need for housing have developed malls into unique apartment complexes.
