Sun, Apr 23, 2017 - Page 15 News List

US mall owners fighting online stores turn to carnivals, concerts

By Heather Perlberg  /  Bloomberg

While each deal varies, the agreements involve a base rent fee for the use of the space and a percentage payment after the event reaches a certain threshold.

Department stores, which sometimes own or control their parking lots, are seeing more value in renting the space after many years of restricting their use, she said.

“Events bring that additional traffic and also encourage people to stick around longer,” Harper said.

There is no guarantee, of course, that people will go inside, JLL Retail specialty leasing director Tracey Hatley said.

However, the events offer opportunities for cross-promotion. Customers receive fliers advertising stores or restaurants inside the mall or coupon books to help draw them in.

That works well for properties like the Santa Rosa Mall in Mary Esther, Florida, Hatley said.

“They are a property that’s struggling with occupancy, struggling with driving traffic to the center, so they love doing parking-lot events,” she said. “You can see it from the road and it gets people on the property.”

The US is home to about 1,100 shopping malls, said Laurel Durkay, vice president and associate portfolio manager of real-estate securities at Cohen & Steers Inc.

That number could be cut in half over the next decade, though it might not take that long to determine who the winners and losers are, she said.

Until malls can figure out how to bring in steady crowds, expect to see corn dogs and carousels in their parking lots, Herkimer said.

“If retail turned around and vacancy rates dropped again, and all the sudden these malls and shopping centers are full of tenants, I think there’d be a circle in the other direction,” he said. “They’d say: ‘We need the parking space for customers.’”

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