Some Boston-Area Malls Have Recovered, But Many Are Still Fighting For Their Lives
Like many suburban towns in the 1970s and '80s, North Attleborough became the home of a shopping mall that would put it on the map. More than 300,000 shoppers poured through the doors of Emerald Square Mall on its opening weekend in 1989, and it would soon become a shopping destination for the surrounding region.
The opening marked a turning point for North Attleborough, transforming its section of Route 1 from a pass-through corridor into one of the busiest shopping strips in the area, with the 1M SF mall as a gateway for other retailers and restaurants to set up shop.
But the mall’s bustling heyday came to an end, as the rise of e-commerce and a pandemic devastated the retail industry and left scores of suburban malls fighting for their lives. The Emerald Square Mall, now 30% vacant, was reportedly sold last month after Simon Property Group gave the mall back to its lender in 2020 and it was placed in court receivership. North Attleborough officials are now desperate to save the beloved mall.
“We've really done everything we possibly can to try and turn the mall into something that is more than just how it’s hanging on, but unfortunately it seems that's the way it is right now,” North Attleborough Economic Development Coordinator Lyle Pirnie told Bisnow.
Unlike malls in Boston’s urban core or along the Route 128 corridor in Burlington, which benefit from wealthy populations and job growth, some malls in the outer suburbs have struggled to keep up with changing consumer preferences and dwindling tenant opportunities.
The amount of vacant space in Boston-area malls totaled 740K SF at the end of the first quarter, nearly double the vacancy at the end of 2019, according to a report from ABG Commercial Realty, using data from CoStar. The mall vacancy rate during that period rose from 1.6% to 3.1%.
“The truth is, in today's retail world post-Covid, it's going to be hard to fill that much retail in that market,” said Corey Bialow, who represents retail tenants as CEO of Bialow Real Estate. “Everyone's kind of consolidating and going smaller, and trying to just have their core assortments in the store and ship everything else online.”
The rising vacancy in malls like Emerald Square has caused dramatic cuts in their property values and damaged local government budgets.
In 2009, the mall was valued at $197M, not including its anchor stores, and the town received around $2M in real estate taxes from the property. In April 2021, Sears closed its Emerald Square store, and as of this year, the mall’s assessed value stands at $65M, according to property records.
“The mall opened in the late '80s and since then, the assessed value of the mall has decreased almost on a straight-line basis,” Pirnie said. “The mall is the biggest taxpayer in town … The amount of taxes that's paid has declined and we have a budget that we have to make revenue equal expenses, so it's forced us to go elsewhere to look for tax revenue.”
Emerald Square was one of many underperforming malls across the country that Simon Property Group handed back to lenders during the pandemic, including at least one other Boston-area mall: the Solomon Pond Mall in Marlborough. It also went delinquent on interest payments for the Square One Mall in Saugus, but a Simon spokesperson said it still owns the asset.
Simon Property Group Regional Vice President of Leasing Laura Schwartz declined to comment on the malls that have gone through distress, but she said she is optimistic about the core malls in its Boston-area portfolio.
“We are seeing higher sales year-over-year,” Schwartz said. “Our suburban assets like Burlington, North Shore, South Shore, they're seeing even more traffic than they did pre-Covid because of people living and working closer to their houses than previously. It's kind of a reversal of the trend that we saw pre-Covid.”
Nationally, Simon experienced a $500M increase in revenue last year, according to its 2021 annual report, and it grew its cash flow from $1.3B in 2020 to $3.88B last year. It also completed over $425M in redevelopments, including the transformation of the former Sears space at Burlington Mall into a multitenant shopping and dining hub.
The recovery that some well-positioned malls have experienced over the last year hasn’t been evenly spread out across the market, Bialow said.
“The top 50 malls in the country are as strong as ever, many are doing better than pre-Covid. It's when you get beneath that that we're starting to see issues,” Bialow said.
The Boston area has long had an oversaturated mall market, experts told Bisnow last year. The region had 24M SF of shopping centers last year, making up 9.9% of its overall retail supply, the third-highest concentration of malls among major U.S. metropolitan areas. Since then, a handful of these malls have either been repurposed or have fallen into disrepair.
Bialow was part of a group led by Finard Properties that bought Greendale Mall in Worcester in 2019 with plans to turn the space into a mixed-use property. But plans changed during the pandemic, and the mall was demolished in August to make way for an Amazon distribution center.
Wilder Co., a Boston-based retail development firm, has converted multiple older malls into open-air mixed-use centers. In 2000, the company redeveloped the failing Methuen mall into The Loop, a 480K SF mixed-use development. The company did the same for Arsenal Mall in 2013, which is now known as Arsenal Yards in Watertown.
Wilder Co. principal Tom Wilder said it is important for owners of Class-B and Class-C malls, which tend to be older properties with more vacancy, to start considering other uses.
“If you're a fortress mall, you're able to lease but if you're anything less, then you really got to be thinking about 'what are the alternative uses that I can bring in? And how do I still make it a vital part of the community?'” Wilder said. “That's the good thing about a lot of these B and C malls. They do have good locations, but it's just the wrong concept at this point in time.”
North Attleborough launched a last-ditch effort to save Emerald Square Mall in March. The town embarked on a yearlong plan to create new zoning and land use bylaws that would provide redevelopment options for the new owner, which hasn't been made public yet. Pirnie said he hopes the bylaws will help bring the same success to Emerald Square as he has seen in other malls nationwide.
“We'll continue to do that as [developers] come in with requests for space to build large factories or are looking for a place to develop large apartment complexes,” Pirnie said. “We will steer them towards the mall and do everything we possibly can to facilitate the conversion.”
CORRECTION, JUNE 30, 5:35 P.M. ET: A previous version of this story incorrectly stated the status of the Square One Mall in Saugus. A Simon spokesperson said it still owns the asset but declined to comment further.