Visits To Top-Tier Malls Are Bouncing Back From Rising Gas Prices

Weekly visits to top tier malls have ticked up over 2019 levels, in what one analyst is calling “the latest testament to the seemingly endless resilience” of the subsector. 

Placer.ai’s Ethan Chernofsky writes in a new analysis that while rising gas prices “clearly played a role” in sending visits plunging in early March, by the weeks of March 14 and 21 “the situation had already stabilized,” with visits up 0.5% in the week beginning March 14 compared to the equivalent week in 2019. That same week, visits to open-air lifestyle centers and outlet malls were down just 1.8% and 2.4% respectively, he said.

“The return to pre-pandemic levels shows that top tier centers continue to have a pull that brings in core audiences for a wider experience centered around their powerful combination of retail, dining and entertainment,” Chernofsky says. “The latest rebound shows that these formats have a built in draw that continues to create excitement and interest. This is only augmented by shifts taking place within malls to create more urgency and differentiation from a tenant mix perspective.”

According to the National Association of Realtors’ recent Commercial Real Estate Outlook, growth in the retail bricks-and-mortar environment will be driven by experiential retail concepts to drive foot traffic to malls. NAR estimates that vacancy rates are likely to decline further to 4.6% this year.

The capital markets outlook is also strong for the sector, Senior Managing Director Chris Angelone, National Retail Group Leader and Boston Office Co-Head, JLL Capital Markets, told GlobeSt.com in an earlier interview.

“Retail is well poised for 2022 and will garner increased interest from institutional investors for high-quality property across the spectrum, with continued upward pressure on rents, and downward pressure on cap rates subject to interest rates and other mitigating factors,” he said.