How Do You Evaluate the Future Potential of a Mall?

Having either directly worked on, reviewed or underwritten hundreds of malls across the U.S., we know that each mall must be individually analyzed. There are no “rules of thumb” that automatically tell you that a mall has a future. Metrics including population minimum thresholds, average income ranges, or current in-line sales levels, etc. are not always reliable predictors of future potential. The full context within which the mall operates must be understood.

The following are critical areas to carefully consider:

  • Site and Locational attributes of the property
  • Trade area demographic characteristics and historical trends
  • Market economic drivers supporting the local/regional economy
  • Competitive positioning/competitive landscape
  • Current tenant mix, recent additions and closures
  • Current and historical in-line tenant performance
  • Rent roll and lease clause review
  • Anchor lineup, current and historical performance, risk assessment
  • Physical condition of property (interior and exterior)

Thoroughly analyzing each of these key areas allows one to fully understand and assess the challenges and opportunities, and to tailor a specific plan to maximize the property.