The ubiquitous shopping plazas, some highly successful and others empty shells, increasingly are providing experiences beyond shopping in both the U.S. and China. Some also have found partners in feared internet competitors Amazon and Alibaba.
Depicted in American popular culture as places where suburban "mall rats" loiter and outrun security guards, as in the 2009 film Paul Blart Mall Cop, enclosed shopping malls, under siege with the ascent of e-commerce, are being forced to reinvent themselves or fade away.
The malls' heyday may have been in the 1970s, but some of the sprawling complexes are finding that they don't have to sit there and be bludgeoned by online giants such as Amazon in the U.S. and Alibaba in China (which incidentally, are snapping up and/or opening their own physical stores). Rather, many malls are looking at mixed uses for a renaissance.
A coming together of physical and online seems to be unfolding, with virtual reality and artificial intelligence also coming into play. Entertainment and dining are major factors, too.
What the malls can offer that online shopping can't is human interaction. Even if a mall can't give someone the lowest price on a flat-screen TV, it can provide a cozy café with free Wi-Fi, a 4-D movie theater, an aquarium and miniature golf.
Many of the legacy malls also sit on prime real estate.
Industry experts say 25 percent of U.S. malls likely will close in the next five years, or about 300 out of the existing 1,100, CNN Money reported.
China has nearly 4,450 shopping centers — four times the U.S. — and an additional 7,000 are estimated to open by 2025. A 2016 report by the Chinese Academy of Social Sciences predicted that one-third of China's malls will be history by 2020, unless they transform.
While certainly some malls in the U.S. are on life support, the 10 most valuable U.S. malls owned by real estate investment trusts (REITs) are generating between $960 and $1,450 in sales per square foot and are quite valuable, research firm Boenning & Scattergood told CNBC.
Four of the top 10 are in the Northeast. Two are in New York state, one is in New Jersey and another is in Pennsylvania. The Ala Moana Center in Honolulu tops the list. The open-air mall hauls in $1,450 per square foot and is worth $5.7 billion.
King of Prussia Mall, a 2.8 million-square-foot shopping center outside Philadelphia, is in position to make a stand against online shopping.
The 50-year-old complex has more than 50 food venues and a concierge lounge. But a J.C. Penney department store closed in July, creating a hole in the anchor-store lineup. Simon Property Group is planning a mixed-used development for the 17-acre Penney site, part of a makeover that CEO David Simon has compared to Hudson Yards in Manhattan.
"I don't think people appreciate how dynamic these properties are and how they evolve over a long period of time," said Rick Sokolov, Simon's president and COO.
Retail landlords have spent billions on changes that focus on experiences that can't be found online, brokerage Jones Lang LaSalle says.
King of Prussia is the second-largest mall in the U.S. after the Mall of America in Minnesota, according to the Directory of Major Malls.
Indiana-based Simon is spending $1 billion a year to upgrade its properties, Sokolov said.
"We're spending money to make our properties incrementally more relevant and more attractive to retailers and generating returns while we do it," he said.
Triple Five Group of Canada is building a giant "anti-mall" in northern New Jersey, just west of Manhattan.
The $5 billion complex, called American Dream, is a massive hybrid between a shopping center and amusement park.
"It will have less retail space than Mall of America and 60 percent more in entertainment offerings," Debbie Patire, Triple Five's senior VP of marketing, told philly.com. "But it really isn't about size these days. It is about the customer experience … combined with best-in-class entertainment, attractions and restaurants."
Phase 1 of the mall is under construction next to MetLife Stadium, where the NFL's Giants and Jets play.
