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s the retail landscape continues to evolve, shopping malls and developers are well-positioned for 2025. Limited desirable real estate and a shift towards repurposing underutilized space have created a competitive market where brands and retailers must negotiate favorable leases with landlords. This has led property owners to diversify their offerings by incorporating new uses such as housing, experiential destinations, and community-driven initiatives.
Simon, the nation's largest real estate investment trust, is transforming its properties through unique strategies tailored to each location. Eric Sadi, copresident of Simon's malls platform, notes that this approach involves adding residential units, significant amounts of food and beverage options, and carefully curated brand mixes specific to individual markets.
Tanger, another prominent operator, has seen success with its strategy of elevating the shopper experience through diversified tenant mixes and experiential destinations. Stephen Yalof, president and CEO, attributes their growth to leveraging their platform and driving total rents, including 11 consecutive quarters of positive leasing spreads.
Recent data from MRI Software indicates a resurgence in mall traffic, with shopper numbers increasing by 12.3% on the day before Christmas and 8% on Black Friday compared to the previous year. Simon is investing $1.3 billion in major projects over the next few years, including Brea Mall's redevelopment into new retail and dining options, luxury apartments, and a Life Time athletic club.
Other notable redevelopments include Macerich's FlatIron Crossing Mall conversion into housing, Kimco Realty's Westlake Shopping Center transformation of a former Burlington Coat Factory into housing, and Westfield's Garden State Plaza addition of apartments. Even closed department stores are being repurposed, such as the Sears store in Portage Park, Chicago, which was converted into 6 Corners Lofts, a 206-unit loft-apartment building with a Target and various amenities.
The Brixmor Property Group is redeveloping Heritage Square in Naperville, Illinois, into "a restaurant district" called Block 59. The project involves demolishing existing real estate and expects to complete the redevelopment by 2026. On a smaller scale, The Mirai Design District, a mixed-use project designed by Kengo Kuma & Associates, is set to commence construction in Q2 of 2025 and open by the end of the year.
Vornado Realty Trust has been transforming Manhattan's Penn District around Penn Station into a vibrant campus with state-of-the-art office complexes, public spaces, and amenities. The area now features redesigned streets, pedestrian ways, restaurants, outdoor seating, and greenery, making it an attractive destination for both work and leisure activities.
