Although the commercial real estate market – and leased retail space in particular – has struggled over the past two years, many malls “in urban settings have managed to thrive in spite of the recession”, according to a California real estate broker specializing in retail properties[1]. While Richard Rizika admits that malls in his locale, Los Angeles County, are “faring much better…than in the nation on average,” he believes that a shift in the way that stores are promoting themselves and the locations that retailers find attractive could actually ultimately save the urban mall from extinction.

Rizika points out that many chain stores that used to have locations in “remote, suburban malls” have closed these outlets and moved or shifted their focus to “busy urban centers” that have more traffic on a more consistent basis. Additionally, since many of the “traditional” malls in the area have recently had makeovers, these new, trendy locations are proving very attractive to retailers. In fact, two of the local area malls are nearly 100 percent leased as a result of such makeovers. While “malls in outlying areas are having more trouble absorbing space,” says Rizika, a good location and a modern look can go a long way toward filling up stores. Once retailers realize that a mall location can actually help them stave off the constant risk of consumers “forgetting” about the store and the product, a mall is well on its way to being revitalized.

In fact, it’s possible that some recent items of news that could look bad at first for malls around the country – such as J.C. Penney shutting down stores around the country in the coming months[2] – the absence of some of the bigger brands and chain stores can actually be an opportunity for a struggling mall to turn things around. Many mall locations are finding that a mix of upscale brands like Coach, eco-friendly services like green car washes and fashionable floor plans that allow for lots of light, space and even a “dining terrace” instead of the food court, can completely revitalize the retail space. However, often this type of remodel is not even an option when the bulk of the mall area is leased by major department stores. With flexibility and creativity, it looks like urban malls and retail spaces could make a comeback this year. Would you invest in a remodel for retail space in your part of the country?

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[1] http://www.latimes.com/business/realestate/la-fi-commre-retail-20110123,0,1033716.story

[2] http://www.dailyfinance.com/story/company-news/jc-penney-closing-stores/19812335/