A little over two years ago, the owners of Northlake Mall made a splashy announcement about a $50 million project they were planning that would add more than 200,000 square feet on an 11-acre site next to the mall’s entrance. It was to include all kinds of retail, including a home furnishings store, entertainment and restaurants.
Construction was scheduled to begin in early 2017. A year later, however, the project hasn’t yet broken ground.
Northlake’s owner, Starwood Retail Partners, hasn’t abandoned the project, but it is going back to the drawing board. And you might not see the traditional brick-and-mortar retailers you’d expect at a shopping mall.
“As retail continues to evolve, we recognize the need to explore ideas that best serves our community. At this time, we are revisiting our plans and considering residential, retail, entertainment and hospitality options and will share new developments at the appropriate time,” said Adam Kamlet, general manager of Northlake Mall.
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Starwood Retail Partners hadn’t yet signed any tenants for the new retail space. The firm is a subsidiary of Starwood Capital Group, a global investment firm that has an array of holdings, including hotels, condominiums, senior living facilities, apartments and offices.
Northlake’s expansion plans come at a particularly troublesome time for retailers as competition from Amazon and other e-commerce companies grows. In 2017, store closing announcements more than tripled to a record 7,000, according to retail think tank Fung Global Retail and Technology, CNN Money reported.
This year could see even more closures, experts say.
To fill the void left by retailers that have closed their doors, mall owners and landlords have been getting creative in Charlotte and around the U.S. with unexpected but in-demand new tenants, including grocery stores, bowling alleys, medical offices and movie theaters.
In order to boost customer traffic, malls nationwide have been reinvesting in their properties.
In 2015, for instance, SouthPark mall owners Simon Property Group did extensive interior and exterior renovations at the south Charlotte mall, including new luxury seating areas and new LED lighting. Simon also gave Concord Mills a significant interior facelift in 2016.
Over the last three years, mall owners have spent more than $8 billion in renovations, according to a September 2017 report from JLL, a Chicago investment management company that specializes in real estate.
“Before an owner begins a renovation, they need to consider the value of the property and the cost of the redevelopment, as well as their anticipated return,” said Larry Jensen, director of business development for JLL’s National Retail Property Management practice, in the report.
“But, they also need to consider the alternative. What’s the cost of not renovating as shoppers become bored and move on to other venues?”
Original construction on Northlake, a 1.1 million square-foot mall, wrapped up in 2005, making it Charlotte’s most recently completed enclosed shopping center. One of Charlotte’s largest retail centers, Northlake was sold to Starwood, a private real estate investment firm, in 2014.