The Fall of the American Mall: What Comes Next?

Do you remember hanging out with friends at the mall on weekends? Once a hub for socialization and shopping, many malls are undergoing major revitalization and refocusing to meet the desires of modern consumers. Lynn McKee, director of the Master of Science in commercial real estate program at Georgia State University’s J Mac Robinson College of Business, sits down with Host Carol Morgan on the Atlanta Real Estate Forum Radio podcast to discuss the rise of mixed-use development and how Atlanta stays on top for industrial growth.

Time Capsule of the Past

Malls used to be the center of it all – shopping, dining and community. Teenagers would spend weekends there with friends, while families would drive a considerable distance for dinner at the mall. McKee describes how, for his family, a trip to the mall was a memorable event.

McKee said, “We went to the mall to shop, but we also went for a social experience.”

As shopping trends have evolved, consumers no longer enjoy the indoor mall setting; they crave the outdoor, fresh-air experience offered at destinations like Avalon and the Avenue malls across metro Atlanta. However, some “fortress” malls in Atlanta, such as Lenox Square and Phipps Plaza, still bring in shoppers from across the country.

Mall to Mixed Use

“Malls offer a large piece of land, usually in a desirable location, with great transportation links and utilities,” notes McKee. “That’s hard to put together. It’s not the mall; it’s the land itself and the connections. That’s what makes the mall valuable.”

To keep up with modern shoppers, malls have pivoted to a more dynamic, mixed-use environment that fosters a live-work-play lifestyle. Phipps Plaza is a successful mall on its own, also benefiting from foot traffic generated by nearby hotels, apartments and office buildings. Lulah Hills, formerly known as the North DeKalb Mall, now bustles with newfound activity thanks to the recent redevelopment, complete with retail and housing.

Residents of Tucker, Georgia, have seen redevelopment at the Northlake Mall, including the addition of Emory Healthcare medical offices in the old Sears space. The additions of shopping and restaurants within the mall and nearby have increased the number of visitors.

McKee mentions that Gwinnett County has bought the Gwinnett Place Mall with plans to redevelop it, which he hopes will take shape in the next few years.

The Impact of Data Centers

“There is no shortage of land- no shortage of land in South Atlanta, nor in rural Georgia, which is where data centers want to be,” said McKee. “We have power in that Georgia Power and our EMCs earn a much better prIce than a lot of other power generators in the country, and are willing to grow.”

A planned data center in Butts County is expected to generate $6 million in annual tax revenue, which is 17% of the county’s budget.

But what are the ramifications associated with the power and water usage these data centers require? There is concern about who is “really” bearing the cost of these centers and the long-term impact on employment. Since very few people staff the centers, it raises questions about the future of statewide jobs. McKee points out that many data centers pay higher energy rates based on how operators label them – data centers or “high energy” use. This consideration protects individuals and residential customers from bearing disproportionate costs and presents the opportunity for the centers to build their own power sources.

Atlanta – Industrial Center of the Southeast

Atlanta has long been known as one of the top five industrial centers in the country.

McKee said, “We have land, we have good transportation and we have population.”

The industrial/ warehouse market was overbuilt during the pandemic and is now correcting itself. As industrial growth slows, excess supply is slowly being absorbed.

Current and Upcoming Commercial Projects in Downtown Atlanta

Downtown Atlanta has grown tremendously in recent years thanks to three key amenities – entertainment, sports complexes and tourism destinations. Some popular choices include:

• State Farm Arena
• Georgia World Congress Center
• Mercedes-Benz Stadium

While these destinations are the homes of the Atlanta Falcons and Atlanta Hawks, they are premier event facilities for concerts, conferences and conventions in the offseason. Hospitality follows entertainment, so downtown Atlanta is full of opportunities to stay near the action.

Following the need for residential offerings, people also want to work near their favorite amenities without their neighborhoods being entirely surrounded by office buildings. There is a delicate balance there that is still being discovered within mixed-use developments.

Centennial Yards is an exciting development, a partnership between CIM Group, the City of Atlanta and Fulton County, bringing together a mixed-use space with housing, retail, office space and entertainment. The infrastructure is city-funded, while CIM works directly on constructing hotels, apartments and more! It will also facilitate the walkable lifestyle that Atlanta residents crave.

Curious about what’s next for Downtown Atlanta commercial development? Tune in to the full episode to learn more. For more information about Georgia State University’s Master of Science in Commercial Real Estate, visit https://online.gsu.edu/program/commercial-real-estate-ms/.

About Georgia State University – J. Mack Robinson College of Business

The J. Mack Robinson College of Business at Georgia State University is ranked in the Top 40 business schools nationwide and the Top 50 worldwide. With degree paths in risk management and insurance, computer information systems, marketing and real estate, the school prepares its students with hands-on learning opportunities that embrace modern practices and evolving technologies.

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