The era of retail-tainment
If you want to find where the retail meltdown is, take a look at retail real estate investment trusts. A recent article on the Motley Fool website says REITS for malls were down 9.1 percent in 2019 as more people shopped online and some retailers declared bankruptcy.
Malls are turning into the haves and have nots.
Among the haves is the Whitman family and its Bal Harbour Shops, which recently received a $550 million construction loan for a more than 300,000-square-foot addition. Aventura Mall is also a powerhouse that added a new $214 million wing in 2017, with a food hall and a 93-foot tall slide. Sawgrass Mills ranked second in value among U.S. malls owned by REITS with a value of $4.1 billion, according to a ranking last year by research firm Boenning & Scattergood.
Among the have nots is the Boynton Beach Mall. About a third of the mall is vacant and a redevelopment pitch would add shopping, dining, a hotel and about 1,420 housing units, the Palm Beach Post reported.
The Galleria in Fort Lauderdale still seems pretty busy when I visit, but it has strived to add tenants, such as Powerhouse Gym. Among the more interesting ones is the 23,000-square-foot SeaQuest, which is expected to have 32 exhibits and 1,200 animals. The opening has been behind schedule, but the SeaQuest website says it will be open early this year. It has attracted opposition from PETA.
Our cover story on IT’SUGAR and founder CEO Jeff Rubin talks about the importance of retail-tainment. Retailing needs to be an attractive, engaging experience if you are going to succeed in the world of Amazon Prime. IT’SUGAR is succeeding with locations in tourist destinations, lifestyle centers and a few traditional malls and outlet centers sprinkled in. All three types are profitable, said Jarett Levan, president of BBX Capital, the parent of IT’SUGAR.
The pinnacle of IT’SUGAR’s accomplishments is the 22,000-square-foot location at the newly opened American Dream mall in East Rutherford, New Jersey. The Statue of Liberty behind Rubin in our cover photo is three stories tall and filled with more than 1.5 million Jelly Belly beans. The first floor’s centerpiece is a lollipop garden filled with nearly 10,000 lollipops. It’s surrounded by more than 5,000 candy bins. The second floor has branded shops for different types of candy. Coming soon to the third floor will be the first Oreo café.
The $5 billion American Dream allocates 45 percent of its space to retail and 55 percent to entertainment and dining. When the entire mall is completed, it will have a Nickelodeon theme park, an ice rink, a Dreamworks water park, Legoland, an aquarium and two 18-hole miniature golf course.
The developer of American Dream is Triple Five Group, which also owns the Mall of America in Minnesota, the nation’s largest at 4.87 million square feet. I’ve seen a lot of skepticism about why Triple Five Group thinks it can succeed with another American Dream in South Florida, which doesn’t lack for shopping places. The answer is its entertainment offerings will turn it into an attraction for tourists and locals. When kids complain to their parents that they are going to Miami and not Orlando, they will be able to promise a trip to an indoor theme park in the mall near Florida’s Turnpike and Interstate 75.
An attorney for the developer told the Miami Herald that final site approval will be submitted by the end of this year construction expected to start in late 2021. It’s expected to be open in 2025.
Retail isn’t dead, but it is reinventing itself.