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New Economy: Mall's may never be the same
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Retail property management and leasing businesses have seen a large decline in occupancy and in profits since the economy has taken a down turn. Malls are seeing 40-50% occupancy rates which drastically take away from property value and from the retailer’s ability to generate profits. Many malls are now looking for ways to gain occupancy and traffic without breaking the bank and without raising leasing rates.
The situation can become a self-fulfilling prophecy as a mall’s occupancy dwindles it becomes less likely businesses will want to enter the vacant locations due to traffic at the location, and the mall’s overall look can become unappealing to customers and business owners alike. Many companies in hopes to regain occupancy are rethinking leases and finding ways to gain capital and invest in the mall’s growth. A local Minneapolis retail location is one such mall that has recently gained a large amount of capital investment through a New York based capital firm Nomura Capital.
Toronto based Tanurb Developments Inc. (Rosedale-Commons Inc.) has recently refinanced with Nomura Capital which resulted in a $14.75 million capital investment, see more information here. The capital has been given in hopes to grow the mall’s business and profits. No word has officially come from the ownership as to what the plans are, but the mall is lacking tenants with less than 44% occupancy in the mall, see site plans and occupancy information here.
The investment capital is certainly needed to gain occupancy in the mall and attract needed traffic. Many malls across the state and the U.S. are following along with projects such as Rosedale Commons reinvestment plans. Malls are rethinking leasing terms and understanding the need to maintain relationships with their tenants.
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