Once heralded as the epicenter of consumerism and capitalism in action, traditional retail outlets and places like malls are becoming obsolete. Modern-day shopping options through online markets like Amazon and e-commerce sites that are quick to deliver directly to consumers’ front doors are more accessible and efficient for shoppers, outweighing time and effort spent on going to a physical store. Before 2020, brick-and-mortar retail struggled to keep up with online shopping perks. Then, once the COVID-19 pandemic impacted the world and the domino effect of stay-at-home orders began, that existing struggle amplified.
As San Diego real estate influencer David Malcolm points out, shopping malls flooded America’s suburbs in the 1960s and 1970s to the point whereby in 1975, malls happily were responsible for over half of the retail dollars spent. Even with the dot-com boom in the mid-to-late 1990s, brick-and-mortar persevered; some stores and malls even thrived. However, by the 2000s, the writing was on the wall.
Getting Smart, a learning design firm, argue that the gradual shift in consumer shopping patterns truly started with the Great Recession in 2008, resulting in the four hundred and forty-one retail bankruptcies that year. Since then, the disruption of how people approached shopping continued retail brick-and-mortar’s downhill spiral leading to its present status.
Several years ago, Coresight Research predicted that 25 percent of malls still in operation would shut their doors within three to five years, calculating that by 2020, 25,000 brick-and-mortar stores would go out of business.
In today’s retail world, these massive real estate assets standing in suburban and urban centers with significant infrastructure and plenty of parking merit the label of an endangered species. Then in today’s new world, how can malls generate value and repurpose empty spaces?
Some real estate professionals have turned to the drawing board and focused on solutions revolving around turning malls into community resources like major event centers, training and education facilities, centers for daycare or elderly or pet care, affordable housing, fitness and health centers, human service centers, or food banks.
Retail Dive’s editor Kaarin Vembar proposes an answer to current-day issues resulting from the pandemic, suggesting utilizing closed malls for coronavirus testing and vaccination centers. Vembar also recommends recovering malls as office spaces, corporate headquarters, and churches. Still, these organizations are also in a transformative state due to modern-day adaptation of online communication, virtual meetings, and remote-working.
Malcolm’s perspective on the subject comes from his personal experience gained from working hands-on with addressing present and future community issues. The San Diego leader and innovator’s 40-year track record shows not only his strong work ethic and commitment to better his community but also his unique ability to recognize real estate opportunities overlooked by others and optimize their value. His forward-thinking productive ideas paired with his retail industry knowledge set him apart from other industry professionals and could put some of the deserted malls to the best use possible.
“It is fairly evident why brick-and-mortar retail like traditional shopping malls hold the title of endangered species,” said David Malcolm. “To solve this issue, repurposing is the answer, but to execute this action properly, I think we need to focus on what large-scale facilities our communities need today and will need tomorrow.”
The real estate specialist approaches the topic of repurposing retail’s most extensive brick-and-mortar dying breed, shopping malls, with the same critical thinking and mindset that proved successful with his real estate and retail endeavors. Malcolm’s insightful, open-minded, and knowledge-driven perspective leading to triumphant and profitable problem-solving always starts with the same question: What is a solution that tackles both a present and future need on the driving fact of location?
Brick-and-mortar retail and real estate have success rates that factor in dependency on location. The location of shopping malls built in suburban and urban communities must play a role in deciphering the best avenue for implementing value back into the structure once again.
“Think about the ‘location’ of where consumers are shopping today: Amazon and e-commerce sites, or online. How can shopping malls bring value to online shopping and vice-versa? The large spaces that shopping malls offer would serve great locations for Amazon fulfillment centers and numerous other companies with e-commerce platforms which require fulfillment centers,” said Malcolm. “Shopping malls’ locations being primarily in urban and suburban neighborhoods bring benefit to the consumer as well as the business with closer proximities creating smaller time gaps for products to be packaged and delivered.”
Malcolm then takes his idea a step further to address an issue that the United States desperately needs help with now and in the future: homelessness.
For 31 years, Malcolm served on the Board of St. Vincent de Paul Management, an arm of Father Joe’s Villages. During four of those years, he served as Chairman. Father Joe’s Villages’ mission is to end homelessness in the San Diego community. Malcolm spent his time on the board getting to know the entirety of the homelessness crisis and making conscious decisions that optimally worked in favor of the homeless and surrounding communities. He believes malls are obvious candidates for conversion into homeless centers that grant a gateway back into society and the working world.
The problem with the current approach to homeless shelters, transitional housing, feeding operations, health, drug, and alcohol treatment services, job training facilities, and ultimately access to work is that all of these different resources are locationally scattered. The size of shopping malls would make it easier to combine everything in one central location, including Amazon and other e-commerce fulfillment centers. Fulfillment centers would hire those evolving from homelessness, helping people struggling with homelessness quicker and more efficiently from point A to point B, or from homelessness to reentering society with a job and a home.
Utilizing empty malls for this combined purpose could result in greater success rates for those returning to productive lives with dignity. This innovative approach can also reduce community impact through centralization, use public dollars more efficiently, and establish a win-win-win for all parties involved and surrounding communities.
“Innovation never comes easy, but the infrastructure is already in place to seize this opportunity and create a real impact in communities around the nation,” said Malcolm.
About David Malcolm
David Malcolm is a real estate expert with over four decades of work experience. Since earning his real estate license while still in high school, he has managed numerous complex real estate, development, and financial transactions. His track record as a successful businessman in San Diego is only matched by his commitment to the community’s betterment.