Malls nationwide are hurting. And the future appears bleak for many of them.
Milwaukee’s regional malls are responding to the challenge in different ways, but in general each is following a similar roadmap: Add unique experiences or offerings and create a community atmosphere that draws in people.
The problems facing malls come from longstanding trends, such as the rise of online shopping, as well as the COVID-19 pandemic, which has driven many away from brick-and-mortar retail locations, at least temporarily.
At least one expert expects 80% of the remaining U.S. malls are going to fail in the next two or three years.
“That’s going to leave Milwaukee probably with only one regional mall when it’s all said and done,” said Nick Engelanian, president of Maryland-based consulting firm SiteWorks Retail Real Estate Services.
Egelanian’s prediction, made at a conference of Wisconsin retail brokers last year, isn’t gospel truth. Not yet, at the very least.
“I think overall, Milwaukee’s malls continue to evolve and be as healthy as comparable malls around the country, due to solid ownership and solid municipalities they’re in,” said Bruce Westling, a retail broker and managing director of Newmark Knight Frank’s Milwaukee office.
The reimagining of some area malls is already underway. Mall property owners are downsizing retail offerings, bringing in unique or experiential retail, building up other uses such as hospitality and residential, or doing a combination of these things.
Take Brookfield Square, for instance. In recent years it has added more unique, entertainment-based offerings such as Whirlyball and a Marcus Theatres’ Movie Tavern. Even more uses have been built recently or are planned to the south of the mall, including a new hotel and conference center, a medical clinic and luxury housing.
Glendale’s Bayshore is another mall property undergoing a transformation.
Formerly known as Bayshore Mall and then Bayshore Town Center, the mixed-use site is reducing its retail footprint, opened a new community space and will eventually have new apartment buildings. Bayshore has also secured major retail tenants along the way, including Total Wine & More and Target.
Bayshore is also under contract with a quick-service restaurant for a 1.5-acre site, and is in talks with another restaurant, Kirk Williams, managing director for Cypress Equities, the operator of Bayshore, said.
Williams said a key to redeveloping Bayshore is creating an “authentic” community versus a “compelled” one.
A gathering of people at a mall’s food court is technically a community, but it isn’t sustainable, he said, noting a consumerism-driven community may have worked for a time, particularly in the 1980s, when malls were at their peak in popularity.
“But it’s kind of like disco: I don’t know if there’s a whole lot of substance here,” Williams said. “For a while we got a little excited, but you look at it now and I don’t know if there’s a sustainable community that can wrap around an idea of consumerism. There’s not an ethos, if you will, that drives the human experience to say there’s longevity here.”
Malls also have more recent newcomers to contend with, including The Corners of Brookfield, a mixed-use development created with features in place that the existing malls are just now working to add.
The Corners has high-end retailers that aren’t located anywhere else in the metro area, such as Von Maur. Its restaurants are locally known franchises, rather than chains. It also has apartments at the center of the activity. The covered parking takes advantage of a natural grade change at the site, Westling said.
Its owners even shy away at the thought of it being called a mall.
“We’re not a mall, we’re a town center,” Robert Gould, chief executive of Brookfield Corners LLC, said.
And it is performing well, even amid the pandemic.
Gould said The Corners’ commercial spaces are about 85% occupied and a comedy club plans to open there this year. Nearly all The Corners’ floor space reopened as of November after COVID-19 shutdowns and, given the pandemic, retail tenants were reporting reasonably strong sales heading into the holiday season.
The town center’s apartments have also been at 95% or greater occupancy since March 2019.
But not everything is rosy for Milwaukee’s malls.
Indianapolis-based Simon Property Group, an investor of shopping malls across the U.S. and owner of the Southridge Mall in Greendale, revealed in November it was engaging in a friendly foreclosure of that mall and others it owned. The village of Greendale has also taken steps toward potentially acquiring the property.
Simon did not respond to a request for comment. Greendale village manager Todd Michaels declined to be interviewed.
Brookfield Square owner CBL Properties also last year filed for Chapter 11 bankruptcy. But the bankruptcy filing will have no impact on Brookfield Square, and that things will continue “business as usual,” a company spokeswoman said.
