Google has leased with Hudson Pacific Properties to convert Los Angeles’ Westside Pavilion mall into an office campus, which will also generate foot traffic and revenue for any remaining stores. (Image credit: Hudson Pacific Properties)
Shopping malls in America have been shuttering their doors for years since online retail stores have become more popular with consumers. Business Insider predicts that 75,000 stores will close across North America by 2024, and that’s on top of the 6,000 that have closed so far this year. As the saying goes, waste not, want not, property developers have taken notice of these closed/near-closed malls and are converting them into offices, with the idea that they will generate increased foot traffic and stable revenues for any remaining stores residing in the complex.
Los Angeles-based Hudson Pacific Properties is one of those developers capitalizing on ‘state of the art creative office space,’ and leased with Google earlier this year to convert the city’s Westside Pavilion mall into a 584,000 square-foot complex for the tech giant. The project is expected to be completed by 2024, at the cost of $410-million. In terms of risk, developers are better off leasing to established companies and even startups over retail outlets that are slowly being dissolved.
Repurposing mall space is also beneficial to co-working enterprises such as WeWork, which provides shared workspaces for entrepreneurs, and freelancers, as well as private offices in a community setting. The math is simple here ─ an unoccupied building doesn’t generate any revenue, recycling, and leasing that space not only brings new tenants but increased traffic flow for those looking for new opportunities. Cities will also likely see increased tax revenue with commercial interests than turning those properties into residential areas.
New England Development is transforming 140,000 square feet on the third floor of their CambridgeSide mall into offices
Developers on the West Coast are not the only ones cashing in on this developing trend, as Boston-based New England Development is redesigning the third floor of their CambridgeSide mall into offices, and Paris-based Unibail-Rodamco-Westfield has co-working spaces in both NY’s Fulton Center and the Westfield San Francisco Center in California. Another developer- Cowork at the Mall has also opened up a co-working space in Chicago’s Water Tower Mall, allowing innovators to design new products with the prospect of selling them at the retail shops in the center.
No matter how we look at it, offering office and co-working space in a center with retail outlets will be beneficial to businesses, stores, and the communities they reside. I hope they keep the pretzel stands.
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