It can contribute to meeting the growing need for new buildings as it promotes urban strengthening and encourages the revival efforts.
The future of malls and departmental stores in the age of the fast-moving e-commerce era appears grim. As traditional retailers shut down, old spaces are getting new faces. Recently, a vacant Macy's outlet in a Washington mall was altered into living quarters for the homeless.
In the meantime, the demand for warehouse space is not expected to slow down. No surprise that Amazon took over an old mall in Ohio to house a new Amazon e-commerce fulfillment center. And that's after Amazon had already moved into a new facility where Randall Park Mall used to sit in North Randall, Ohio.
Real estate development groups save considerable project costs when they initiate reuse projects as demolition and re-building costs could be reasonably controlled. Run-down malls with low footfall offer renewed wide and open spaces within central locations.
"Developers say it takes a community ready to accept that the mall has failed as well as understanding that there are viable job opportunities in logistics real estate. The dramatic shift in the retail industry and growth of e-commerce have led some analysts to estimate that 400 or so of the roughly 1,100 malls in the U.S. will close in the coming years," Esther Fung, a real state reporter for The Wall Street Journal in her article The Best Place for a New Warehouse? An Old Mall.
If pages of history could offer a narrative, the need for a warehouse rose when trade reached a critical mass requiring efficient storage to control the pricing strategy and simplify the exchange process. This is evident in ancient Rome, where the horreum (pl. horrea) became a standard building form. The most studied examples are in Ostia, the port city which served Rome. The Horrea Galbae, a warehouse complex on the road towards Ostia, demonstrates that these buildings could be substantial, even by modern standards. As a point of
reference only less than half of U.S. warehouses today are larger than 100,000 square feet (9290 m²).
These types of projects — converting a shuttered retail space into industrial complexes — have historically been hard to do and are still somewhat rare to see through from start to finish. David Egan, head of the industrial and logistics research division, Commercial Real Estate Services made an interesting remark in an interview with CNBC, "That said, I think we will see more of it. [The trend] will grow slowly, but it will grow."
As sales shift to the internet, retailers and third-party logistics providers like UPS and FedEx develop a growing need to procure easy-to-maintain properties and spaces dedicated to handling the flow of online orders. Industry experts sense that this trend makes reasonable business sense.
In the interview, Egan further said, "Retail assets tend to have greater value than industrial assets". A diminishing preference for the experience of malls and shopping centers presents the current ownership with a creative conundrum.
Perhaps, the only way out is excavating used spaces. Adaptive reuse is potentially the most practical and immediate solution to meet the burgeoning demand of warehouses and warehouse management. Who knows what the future holds? The answer lies in restoration or rehabilitation, and a keen understanding and love for structural compatibility.
Let the market decide.