Forest City Enterprise’s recent proposal to convert the 579,000-square-foot Ballston Common Mall in Arlington County into a major mixed-use multifamily-retail project is the latest local example of a national trend that shows no signs of letting up. More and more older enclosed malls are being phased out and redeveloped into pedestrian-friendly, open-air formats that blend residential, retail and office space to attract workers, residents and shoppers.
According to the International Council of Shopping Centers, City Creek Center in Salt Lake City is the only traditional enclosed mall to be built in the United States since 2006.
Developers and planners are rethinking the mall concept, integrating different property types in hopes of achieving higher occupancy rates and higher rents. Office tenants and residents enjoy the convenience of having multiple retail and dining options nearby, while retailers and restaurants like the increased foot traffic from having both workers and residents on site.
The change is evident in the percentage of the region’s retail space included in such mixed-use projects. Between 2007 and 2011, the percentage of all retail space built in the region included in such projects averaged 26 percent between 2007 and 2011. Since then, approximately 66 percent of all retail space built in the region has been part of a mixed-use project.
The total is expected to increase once plans are finalized and construction begins on two notable redevelopment projects, White Flint Mall in Rockville and Landmark Mall in Alexandria.
Other mall makeovers currently underway in the metropolitan area include the former Springfield Mall, where Vornado Realty Trust is razing and rebuilding 706,000 square feet of shopping, theater and restaurant space between an existing Macy’s, J.C. Penney and Target anchors. The project’s transformation into Springfield Town Center is slated to include 2,000 apartments, a 225-room hotel, and 1 million square feet of office space.
In Laurel, a partnership between Greenberg Gibbons, Somera Capital and AEW Capital is turning Laurel Mall into Towne Centre at Laurel, a mixed-use project with a 435-unit apartment complex and 400,000 square feet of retail space. Groundbreaking is expected soon.
The trend even extends to former retail strip centers, such as Federal Realty Investment Trust’s redevelopment of the former Mid-Pike Plaza in White Flint into “Pike and Rose.” The project’s master plan calls for 1,500 residential units, 1.1 million square feet of office space, a 350-room hotel and 450,000 square feet of retail anchored by a 44,000 square foot state-of-the-art iPic Theatres complex.
This development trend shows no signs of slowing down as developers and retailers compete to stay one-step ahead of consumers’ ever-changing shopping and housing preferences.
D.J. O’Brien is a research manager with CoStar Group in Washington.