How malls look to entertainment centers for survival

Go karting, pop-up shops and full-on entertainment centers could be the new anchor tenants for malls

As e-commerce rises and brick-and-mortar stores close, malls are turning to entertainment centers to keep themselves afloat, according to a new report.

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On a smaller scale, that has meant hosting special events, exercise classes and pop-up shops in empty stores, Curbed reported on Tuesday.

On a larger scale, some malls are hoping to make entertainment centers their main attraction as opposed to retail, according to the real estate website.

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“Mall developers are trying to use entertainment and restaurants as the new anchor tenants,” Randy White, CEO of consulting firm White Hutchinson Leisure & Learning Group told Curbed. “Today, it’s about real-life socialization. Potential shoppers can have all the digital entertainment experiences at home.”

One of the biggest examples of malls focusing on entertainment first and retail second is the American Dream Mall in East Rutherford, N.J., Curbed reported.

The 3 million-square-foot mega-mall includes an indoor ski slope, an ice skating rink and a Nickelodeon theme park. It will also have outlet-style retailers and higher-end brands when it opens fully later this year, according to Curbed.

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In Las Vegas, shopping center Area 15 will have -- among other shops and entertainment centers -- an immersive, interactive “experience” by Meow Wolf, an arts and entertainment group based in Santa Fe, N.M.

The group, which started as an arts collective, previously transformed a Santa Fe bowling alley into an arts installation called House of Eternal Return with “neon plants, secret rooms, spider-like statues and non-linear storytelling”  in 2016, Curbed reported.

On a smaller scale, malls have looked to attractions such as Legoland Discovery Center, Crayola Experience and Andretti Go Karting to bring in traffic -- though that hasn’t always translated to more sales, according to Curbed.

Malls are looking more towards entertainment -- rather than retail -- to bring in more traffic, Curbed reported Tuesday.

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The website reported that malls are also considering esports and virtual reality entertainment companies to fill the gaps.

According to Curbed, Allied Esports Entertainment has made deals with both Brookfield and Simon to open facilities for gamers with consoles, broadcast and streaming capabilities, according to a report from BisNow.

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However, there is a danger in malls relying too heavily on entertainment centers for traffic -- much like how food halls have become almost too prevalent, Curbed reported.

“Six years ago, we had 30 or 40 food halls across the country,” Naveen Jaggi, president of retail advisory services for JLL told Curbed. “We predict that by 2024, there will be roughly 450. There’s certainly a risk at that point of being overbuilt, leading to cannibalization.”

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