5 Reasons Why Regency Square Mall's Days Are Numbered
Ten percent of the nation's 1,000 enclosed malls are predicted to fail by 2022. Here are five reasons why Regency Square Mall will be one of them.
1. Age
People tend to be attracted to new and shiny places. Retailers do as well. So it makes sense that 86.5% of malls hampered by vacancy rates of 35% or higher, were built before 2000. That's bad news for Regency. Its obsolete space dates back to 1967 and the last major facelift happened in the 1990's.
2. Abandonment
Simon Property Group and General Growth Properties are two of the nation's largest mall operators. Both have been busy divesting of lesser-performing properties and decaying older malls. It's no secret that General Growth gave up on Regency earlier this year.
3. Belk Says Bye-Bye
Management has been unsuccessful in luring a long term retailer to replace Montgomery Wards. Soon, they'll have to find a replacement for Belk as well.
The loss of anchor tenants typically accelerate the downward spiral of struggling malls. Malls with vacancy rates above 20% have a hard time of finding new tenants when old ones leave. With the former Montgomery Wards space sitting empty, for the most part, since that chain shut down in 2001, those familiar with Regency should understand this dilemma.
It's already bad enough that Dillard's has been converted to an outlet store not even open on Mondays and that Sears and JCPenney are two major anchors. Both struggling chains are hemorrhaging billions and neither may not survive to see 2020.
However, anchoring both the east and west malls, Belk was the one solid Regency anchor that offered hope of retail revitalization. Unfortunately, those dreams were dashed earlier this year when Belk announced its decision to give up on Regency in order to move to greener pastures at Atlantic and Kernan Boulevards.
4. Too Much Retail
Belk's new store under construction at Atlantic North shopping center.
Those pointing to a bright future for the mall, quickly highlight its regional location and the great access it enjoys. What they overlook is the fact that there's simply too much retail space in the Regency area for the number of people still shopping there. Nearly every retailer wanting a piece of Arlington's pie is already operating at Regency or a nearby strip mall. Furthermore, new retail centers like Atlantic North, which happens to be where Belk is fleeing to, only exacerbate the problem.
5. Mason Asset Management, Inc.
The company was heralded locally as Regency's savior when it purchased the aging mall in early 2014. However, look no further than Bradenton's DeSoto Square Mall to see where Regency's story will end.
Mason purchased Bradenton's ailing mall from Simon (see no. 2) in 2012. Unable to find a traditional retail anchor for an abandoned Dillards space, Mason filled the vacancy with a furniture store. Instead of stabilization, Macy's recently decided to jump ship, permanently closing its DeSoto store in September 2014.
Mason's strategy for Regency appears to be similar. Fill abandoned retail space with whatever is willing to commit to a lease. This strategy will drop vacancy rates, but you may not end up with a traditional retail shopping destination as a result. Enjoy Regency Square Mall while you still can.
Editorial by Ennis Davis, AICP. Contact Ennis at edavis@moderncities.com
People tend to be attracted to new and shiny places. Retailers do as well. So it makes sense that 86.5% of malls hampered by vacancy rates of 35% or higher, were built before 2000. That's bad news for Regency. Its obsolete space dates back to 1967 and the last major facelift happened in the 1990's.
2. Abandonment
Simon Property Group and General Growth Properties are two of the nation's largest mall operators. Both have been busy divesting of lesser-performing properties and decaying older malls. It's no secret that General Growth gave up on Regency earlier this year.
3. Belk Says Bye-Bye
Management has been unsuccessful in luring a long term retailer to replace Montgomery Wards. Soon, they'll have to find a replacement for Belk as well.
The loss of anchor tenants typically accelerate the downward spiral of struggling malls. Malls with vacancy rates above 20% have a hard time of finding new tenants when old ones leave. With the former Montgomery Wards space sitting empty, for the most part, since that chain shut down in 2001, those familiar with Regency should understand this dilemma.
It's already bad enough that Dillard's has been converted to an outlet store not even open on Mondays and that Sears and JCPenney are two major anchors. Both struggling chains are hemorrhaging billions and neither may not survive to see 2020.
However, anchoring both the east and west malls, Belk was the one solid Regency anchor that offered hope of retail revitalization. Unfortunately, those dreams were dashed earlier this year when Belk announced its decision to give up on Regency in order to move to greener pastures at Atlantic and Kernan Boulevards.
4. Too Much Retail
Belk's new store under construction at Atlantic North shopping center.
Those pointing to a bright future for the mall, quickly highlight its regional location and the great access it enjoys. What they overlook is the fact that there's simply too much retail space in the Regency area for the number of people still shopping there. Nearly every retailer wanting a piece of Arlington's pie is already operating at Regency or a nearby strip mall. Furthermore, new retail centers like Atlantic North, which happens to be where Belk is fleeing to, only exacerbate the problem.
5. Mason Asset Management, Inc.
The company was heralded locally as Regency's savior when it purchased the aging mall in early 2014. However, look no further than Bradenton's DeSoto Square Mall to see where Regency's story will end.
Mason purchased Bradenton's ailing mall from Simon (see no. 2) in 2012. Unable to find a traditional retail anchor for an abandoned Dillards space, Mason filled the vacancy with a furniture store. Instead of stabilization, Macy's recently decided to jump ship, permanently closing its DeSoto store in September 2014.
Mason's strategy for Regency appears to be similar. Fill abandoned retail space with whatever is willing to commit to a lease. This strategy will drop vacancy rates, but you may not end up with a traditional retail shopping destination as a result. Enjoy Regency Square Mall while you still can.
Editorial by Ennis Davis, AICP. Contact Ennis at edavis@moderncities.com