Malls: the new normal Retail Capital Markets Managing Director David Monahan details how desperate times don’t call for desperate measure for the ever-changing mall sector.


Straight out of college, David kick-started his retail career as a financial analyst at Peachtree Center, in Atlanta, GA, owned by Equitable Real Estate – a 2.5-million-square-foot complex with six office buildings, two hotels, a shopping mall, parking garage and athletic center – not too shabby of a start. Three years later he helped sell that same property. This unintentional yet advantageous beginning was one of the smartest decisions he’s made as it was an ideal learning ground and catapulted his 20+- year stint in retail.


With the negative headlines around the mall sector, David has continued to see the silver lining and support JLL’s Retail Capital Markets platform set the essential building blocks required for mall owners and investors to thrive.


David shares, "The mall sector is an interesting space, and is not without its challenges; however, the challenges are oversold.


All retail and all regional malls aren’t dying. One of the biggest challenges is there is a different construct of the regional mall


16 THE RETAIL INVESTOR


today than when they were first developed in the 1980’s and ‘90s. In prior cycles, malls were heavily reliant on anchor stores as they were the foundation of mall. Currently, anchor stores are becoming less relevant in driving foot traffic to centers.


“Yet, even with the changes in the mall sector, there’s still a tremendous opportunity for the space,” David shares. Entertainment, food and beverage and health and leisure concepts are on the rise to backfill anchor spaces which is ideal for mall owners looking to diversify their retail mix. And, other owners are looking outside of retail to achieve growth by adding alternative uses like hotel, residential and office space. Owners are beginning to realize that their centers won’t maintain with the same antiquated models, anchored solely by department stores. “This notion is interesting because 10, 15 and even 20 years ago, if you re-tenanted an anchor with anything other than retail use, it was viewed negatively – now it’s a positive. By bringing other uses to the site, you make it a longer active period shifting the hours of relevance from 10 -12 to 18+ hours,


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