IRVINE, CA—For the past decade the question about regional malls falling to the wayside has been a great concern for owners and retailers. That is according to locally based Don MacLellan, senior managing partner, Faris Lee Investments. MacLellan, who spoke with us for an upcoming November Real Estate Forum feature, says that “the regional mall concept will continue to thrive dependent upon a number of factors including the demographic make-up, the population density, trade area competition and the strength and performance of the specific mall anchors.”

According to MacLellan, the advent of big box, discount-oriented community centers has taken a significant market share from the older, middle-market department store anchors such as Sears, JCPenney, etc. “The strongest performing regional malls are either in more affluent trade areas with higher disposable incomes or are the dominant malls in the secondary market  locations,” he says. “Many traditional non-performing regional malls have been forced to reinvent themselves. They have transitioned into big box shopping centers (discount focus) or outdoor lifestyle centers that really focus on specialty retail, entertainment – like movie theaters with a myriad of restaurant-oriented concepts.”

Population density plays a big part when it comes to malls in secondary locations, he says. “What we have seen in these secondary trade areas is that there is only demand for one regional mall, leaving the others forced to morph into alternative uses.”