The Prescott Gateway Mall plans for the future while facing a 30 percent vacancy rate
The story used to be that malls were closing across the country because of factors such as the poor economy, the emergence of eCommerce (online shopping) as a formidable shopping alternative, and the belief that traditional shopping malls were simply out of fashion.
Many malls are still struggling, but the story has shifted slightly as the economy gradually recovers and the number of malls has thinned due to closures, and the construction of many new malls has halted, according to recent studies.
A report by the International Council of Shopping Centers (ICSC) released in March showed that occupancy rates on average for malls across the country are at their highest (94.2 percent) since 1987 and another report by the global management consulting firm A.T. Kearny states that 90 percent of all U.S. retail sales still happen in stores.
Despite those statistics, the Prescott Gateway Mall, the only traditional shopping mall in Yavapai County, isn't doing so well.
The mall's current occupancy rate is about 70 percent, according to mall representatives.
"Some of my favorite stores are gone," said shopper Michael Jaramillo, 25.
The decline in tenants does not seem to slowing at this point; Lunar Golf and K Momo left last month.
To fight the trend, representatives of the Dallas-based company Tabani Group, which owns the majority of the mall, said they are working with the region's premiere leasing agents to attract both prime national and regional tenants as well as increasing dining opportunities on the property.
"By offering increased shopping and community events, we are confident that increased foot traffic will yield increased tenant sales," said Theresa Dorlan, leasing and marketing coordinator for Tabani Group.
When Tabani Group bought the dominant share of the mall from J.P. Morgan Clearing Corp. in late 2013, its representatives expressed optimism for bringing in events for the community to enjoy and high-quality tenants.
In some ways, they have done this.
"We've introduced new events and community partnerships that appeal to visitors of all ages," Dorlan said, citing the monthly Model Train Exhibit, free movie screenings, movie casting calls, Home Based Business Showcases, a Paws for a Cause fundraising event, SciTechFest, Special Needs Prom, an annual Autism Resource Fair, Turkey Bowl, seasonal children's craft events, speed dating, and the Vietnam Traveling Memorial Wall.
Although the occupancy rate is less than ideal, the mall has held onto most of its larger tenants, a point that Dorlan said Tabani Group is proud of.
"We are very pleased with our lease renewal rate," Dorlan said.
Additionally, the mall's anchors (Sears, J.C. Penney and Dillard's - which all own their parcels of land) have stayed open despite a significant number of store closures by those companies in other parts of the country.
A study by Green Street Advisors, a real estate research and advisory firm, stated that the health of a mall's anchors is a pivotal determinant of whether or not it will stay open as a whole.
Follow Max Efrein on Twitter @mefrein. Reach him at 928-445-3333 ext. 1105, or 928-642-7864.