Reprinted from The Wall Street Journal
Overbuilding, e-commerce force landlords to get creative with new developments
Visitors used to flock to the Highland Mall in Austin, Texas, around the holidays to stroll through the city’s first enclosed shopping complex and admire the giant Christmas tree crafted from poinsettia plants.
But this holiday season, no shopping will be done there. Workers are converting the 600,000-square-foot structure into a campus for Austin Community College with classrooms, lab space and a culinary arts center.
Austin’s economy is strong and its population swelling, but Highland couldn’t attract enough shoppers to stay afloat.
“Competition came up and killed it,” said Matt Whelan, principal at developer Red Leaf Properties LLC, which is working with the college on the project.
An era of relentless expansion for American shopping centers is coming to an end as a toxic brew of overbuilding, the rise of e-commerce and a wave of retailer bankruptcies force landlords to reimagine once-lucrative properties.
Some owners are converting struggling malls into apartments, offices and industrial space, while others are turning big chunks of retail space into parks and playgrounds to keep shoppers interested.
To read the full article, visit http://www.wsj.com/articles/shrinking-u-s-shopping-malls-get-makeovers-1448361001