NEW YORK--With a limited market for top quality malls in the United States, the nation's largest REITs have to figure out ways to continue to grow to satisfy investors. Simon Property Group and General Growth Properties are a study in contrasts, taking markedly different tacks, as their leaders explained at the Barclays 2014 Global Financial Services Conference here.

The United States, with approximately 1,100 malls, really should have some 700 to 800, said Sandeep Mathrani, General Growth CEO, of which 425 being of high quality, defined as A and B+ . And those aren't being sold these days.

“There are no class A malls [for sale] per se – they're in the hands of REITs and a handful of private owners,” Mathrani says. GGP itself has been focusing on selling lesser-quality projects to recycle the capital into redevelopments.

How to diversify and grow, then? At GGP, it's hitting the streets – literally. The company is now investing in urban retail, acquiring properties in New York City, Chicago and San Francisco that Mathrani says is a complement to its top malls.

“Urban retail is an incubator. It's better than buying a piece of land and earning zero percent until it's fully stabilized,” Mathrani explained. And despite asking rents of between $3,000 per square foot and $3,500 per square foot, “There is more demand for Fifth Avenue space than ever.”

Simon Property Group, too, is recycling capital into redevelopments, noted David Simon, Chairman and CEO.

And don't count out smaller centers-–Simon Property Group just spun theirs off into Washington Prime, which focuses on secondary “markets that aren't sexy, but they do have enough to support a mall and are good, viable real estate,” Simon said. He is a director of Washington Prime, and Simon Property Group COO Richard S. Sokolov is chairman of Washington Prime's board.

“Muncie, Ind., can support a mall. Is it as easy or exciting as [metro New York's] Roosevelt Field? No,” Simon said. “But it's a good mall. Without question, smaller malls in decent markets can survive. That's why we didn't sell the WP [centers].  Let's see how they do. They'll do just fine.”

Different companies, different strategies to grow in a mature market. It will be fun to watch which proves to be the better investment.