Posted Jul 1, 2020, 8:51 PM
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Join Date: Aug 2002
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The Dying Mall’s New Lease on Life: Apartments
The Dying Mall’s New Lease on Life: Apartments
June 30, 2020
By Patrick Sisson
Read More: https://www.bloomberg.com/news/artic...-into-housing?
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More than half of all U.S. department stores in malls will be gone by 2021, one real estate research firm predicts, and surviving retailers may not be far behind; once-mighty brands such as Cheesecake Factory and the Gap are skipping rent payments, Starbucks is closing physical locations, and developers see a future for big box stores as office complexes. Banks fear “a stampede” of landlords looking to restructure loans after commercial tenants miss their rents. Last week, the Trump administration floated the idea of turning the glut of empty retail space into affordable housing.
- At the Alderwood Mall in Lynnwood, a suburb north of Seattle, an adaptive reuse project already in progress suggests that America’s vast stock of fading shopping infrastructure could indeed get a second life as places to live. Such transformation could even bring malls closer to the “village square” concept they were initially envisioned to become. --- Developers are turning a wide swath of the 41-year-old shopping center into Avalon Alderwood Place, a 300-unit apartment complex with underground parking. The project won’t completely erase the shopping side of the development: Commercial tenants will still take up 90,000 square feet of retail. But when the new Alderwood reopens, which developers expect will happen by 2022, the focus will have shifted dramatically. One of the mall’s anchor department stores, Sears, shut down last year; in a sense, the apartment complex will be the new anchor.
- Lynnwood may offer an ideal testing ground for the long-term opportunities in large-scale suburban mall-to-housing conversion. The suburb of roughly 40,000 people is a commuter bedroom community for Seattle, which has been struggling mightily with a severe housing shortage. The mall had plenty of vacant real estate needed for new homes. And a planned expansion of light rail from Seattle to Lynnwood in 2024, part of the region’s Sound Transit Extension Phase 2, will make market-rate apartments even more attractive for residents who commute to jobs downtown or at the Boeing or Microsoft campuses. --- “There have been some great examples of this kind of redevelopment, such as Tyson’s Corner in Virginia, but it’s very specific to individual cases, and very expensive,” says Nick Egelanian, president of retail consultancy SiteWorks, who predicts up to a third of malls will be vacant due to the economic fallout from the pandemic. “If it’s a good location, you can backfill that with residential, hotel, office and entertainment.”
- Converting commercial real estate to housing may be the best use of land in such an over-retailed country. Big shopping centers tend to be centrally located and connected to transit. --- Excess retail space at malls becoming more adaptive, and filling uses that aren’t hospitality focused, such as residential, or even flex or warehouse space. During a time of housing shortages, Lake believes that transforming empty commercial buildings is a “moral imperative.” --- Lynnwood is a middle- to low-income suburb, with lots of service workers, so the city is working on a housing action plan to make sure social services and education arrive in the community, not just new apartments. The mall may be evolving, but the desire, and challenges, in creating a community-oriented development still remain. You can have acres and acres of housing, but without a community, is it a place? Does it fulfill somebody’s experience? We want to be more than that.
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Developers are converting part of the 41-year-old Alderwood Mall outside of Seattle into housing — a sign of what might be a national trend. Rendering courtesy Brookfield Properties Inc.
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