Mall developer rebrands amid rising vacancy rates
CBL Properties on Thursday said it has wrapped up a strategic rebranding initiative to "more accurately reflect the company’s current strategy, vision and values," according to a press release. The firm was previously known as CBL & Associates Properties.
According to a statement from CBL CEO Stephen Lebovitz, the company's properties are "not just about retail or shopping," but rather gathering places that also include food, entertainment, services, fitness and other new uses. The company is exploring adding hotels, medical, office, residential and education components to many of its properties, according to the release.
The news comes as real estate advisory firm Reis reported that mall vacancy rates in the third quarter rose 0.2% to 8.3%, and mall rents rose just 0.2% in the quarter as most owners kept rents flat, according to a report emailed to Retail Dive. Mall vacancy increased in 34 of 77 U.S. metro areas, and the increase exceeded 0.2% in 24 of those. The effective rent declined in 12 metros. The increases were due to closures of J.C. Penney and Sears stores. From the prior-year quarter, the mall vacancy rate has increased 50 basis points from 7.8%, the lowest since 2008.
Shopping centers and malls are increasingly looking to diversify their portfolios as longstanding anchors like Macy’s, J.C. Penney and Sears close stores and leave gaping holes at their properties. Those closures are exacerbated by specialty retailers like The Limited, Wet Seal, Payless, Rue21, Bebe and Payless reducing their footprints or shuttering altogether. Some property executives see opportunity in those empty spaces, but many have taken pay cuts in the interim as their holdings falter.
In addition to adding non-retail businesses to their malls, property owners are also spiffing them up with technology like chatbots, in the hopes of bringing in customers. That makes sense, as these days customers are on their phones for shopping — even when they buy from physical stores.
The actual retail in malls is in need of attention, too. Earlier this year Simon Property Group CEO David Simon urged retailers to invest in their stores, insisting that e-commerce isn’t the sole reason for their plight. "I'm hopeful that they're going to reinvest in their stores, improve their inventory mix and service their customer better," he said. "And, by the way, we've got to have the same pressure on us to do that. So, it's a two-way street. We are up for the challenge. We have the conviction in our business to do that as you know if you go through our properties by and large, they look, they feel great. We're going to redevelop a lot of opportunities."
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