Across North American over the past several decades, large regional shopping malls were build in suburbs where land was once cheap. Today, there is a growing crisis with those traditional shopping malls. Part of the problem is many shopping malls were built with a single purpose: retail. But today, we understand that urban environments work best with mixed-use formats. The idea follows the work of Jane Jacobs. With less intensification in certain suburban locations, many malls are facing capacity problems. Especially with traditional anchor tenants facing financial challenges that are calling to question the long-term viability of their retail format. In other locations, greater urban density of cities are reaching the suburbs of regional malls, and making the land much more valuable.
In both of these cases, it makes sense for shopping mall developers to consider re-development that increases the density of the real estate while at the same time diversifying the shopping malls use. Typically, a shopping mall is surrounded by large parking areas. and bordered by arterial roads and highways. The first choice to consider is whether pads can be added to the outskirts of the parking space bordering on the surrounding roadways. This only makes sense if the zoning can only be retail and the retail environment can absorb more competition and greater parking capacity is available. Another option is adding residential and office and other use space to the core shopping mall.
There is a huge shift taking place in the shopping mall sector of retail real estate. Companies such as RioCan seem to be taking the right initiatives to improve the situation as outlined by the story below.
RioCan REIT is proposing to build a number of residential towers at the Silver City Gloucester retail complex. The country’s largest real estate investment trust has filed plans with the city for the first phase of a “multi-building residential development” at the property south of Ogilvie Road and north of Regional Road 174 near the Blair transitway stop.