Major department stores such as Macy’s and JC Penny in the United States have fewer and fewer locations across the country and are closing one after another. A few months ago, Macy's announced that it would close 150 "inefficient" stores within three years, hoping to regain its footing after a dismal performance in 2024. It is preparing to close 66 department stores and stores this year, including New York City and Los Angeles and other crowded places.
Large Shopping Malls in the United States are no longer favored by customers due to many factors, including changes in shopping and consumption patterns after the epidemic, with many people shopping directly online, as well as the security crisis with frequent robberies, loss of profits from customers stealing money, the inability to hire employees, and rent Too high and many other reasons.
Real estate developers are focusing on these 'developed' cases, transforming them into new projects including building new residences on vacant lots next to shopping centers and revitalizing old department store spaces to catalyze real estate investment confidence. This article introduces a CNBC interview video showing how Americans are transforming abandoned department store spaces into housing.
Revitalizing abandoned department store malls into mixed-use shared spaces.
According to data from the Investment Property Exchange Services, up to 68% of department stores near Americans have been abandoned. Many large department stores have become desolate ruins. Now, real estate developers have discovered a new solution to address the problem of vacant homes by transforming idle abandoned department store spaces into small rental units. This approach not only solves the issue of vacant homes by fully utilizing existing spaces but also addresses the high rent problem, providing various affordable rental options for single, low- to middle-income individuals.
Real estate developers are revitalizing large department store shopping centers and parking lot spaces, planning to develop residential housing that allows the public to live inside department stores. As of January 2022, at least 192 abandoned shopping centers have plans to develop residential projects within and beside the department stores, including locations in California, Colorado, Florida, Arizona, and Texas. This not only helps alleviate the housing shortage in the U.S. but also provides more convenience for people to shop and enjoy leisure activities at the same time.
What does it feel like to live in a department store?
Department stores are dividing unsold retail spaces into small rooms to attract tenants. People who enjoy shopping in department stores might love living in them, as they can stroll around and see new products every day. CNBC reporters specifically visited the development project at the Flatiron Crossing shopping center in Colorado and the Arcade shopping center project in Providence, Rhode Island, to understand the experience of living in a shopping center. Tenants reported that living in a department store was a great experience; they could get their hair cut at the salon inside the mall or listen to author talks at the bookstore. While the rooms cannot have stoves, there are coffee shops and snack options available for meals. Tenants living above the mall can maintain privacy by closing the blinds. Another advantage of living in the mall is being close to the crowd, so single individuals do not feel lonely and can enjoy the lively atmosphere brought by the crowd.
Now many real estate investors see opportunities and are placing investment targets in real estate projects within department stores. They can rent them out for personal use or as Airbnb. In Taiwan, there are many abandoned buildings and 'mosquito halls,' so we can learn from the U.S. approach to provide more affordable rental housing for the public, while also being more environmentally friendly by utilizing already developed land and spaces, allowing for quick move-in times.
This article discusses how the United States is revitalizing abandoned department store shopping mall spaces into affordable rental housing, first appearing in Chain News ABMedia.
