Mall Redevelopments - March 2024

Phoenix Area Malls in a State of Transition

Over the last decade we have seen a major shift in consumer shopping habits.  It used to be that buying sporting equipment, clothes or makeup meant a trip to the mall or stripmall to shop inside of a store that had the items we sought. Now, we open an app and within minutes it will be ordered and scheduled for delivery. While the shift has certainly made life easier for us and our busy schedules, the change has come with consequences. Most notably, we have seen the fall of big box stores like Sears, JC Penney, Bed, Bath & Beyond and many others. These stores served as anchors for malls across the United States and with their demise so too have we sees the fall of the traditional mall.

In the 80s and 90s malls were a hub of activity.  Not only did people shop at malls, but it was a place where children and teens could spend the day at the arcade, movie theater or food court. It provided one stop shopping for birthdays and Christmas. They were part of the fabric of society. Their demise has meant that owners of the land have been forced to re-conceptualize their use into something more aligned with today’s out-of-house consumer.

Some malls locally have withstood the changes and still harken back to a time when they were the hub of activity. Scottsdale and Chandler Fashion Square, Desert Sky and Arizona Mills are good examples of malls that have pivoted and kept tenants in place and therefore still offer a destination for shoppers. Most malls though have struggled and shuttered. Below are a few updates to malls that have undergone massive changes and where we believe there is opportunity for our clients to consider purchasing real estate near the changed venues.

Paradise Valley Mall, at the intersection of Cactus and Tatum, has been almost completely leveled. The mall originally opened in 1978 but fell off badly in the last decade.  The demolition and subsequent construction have proceeded quickly since it closed in 2021. This year several new commercial and residential projects are slated to be completed. A Whole Foods, Harkins Cine Grill, Frost, Flower Child, Trevor’s Liquor, Bianco Cocina, Sephora, Aveda and Wren House Brewing in addition to 400 apartment residences will dramatically change this once bustling mall. Located near Phoenix, Scottsdale and Paradise Valley, this has long been a desirable area to live that we believe will only become increasingly in demand very soon. The area north and west of the mall, in particular may gain from the changes. Homes there are currently affordable, but could be the next spot to start to turn.

Metrocenter, at Dunlap and the I-17, is set to get a serious revitalization over the forthcoming years. Pre-demolition work starts this year and there is an approved $850 million dollar redevelopment planned. The Metro District, a mixture of retail, restaurants, hotels, parks and residential development is just a few years away.  A new light rail terminus was recently completed at Metrocenter, further adding to its urban allure.  When complete, the transformation could be stark and it may result in a massive change in residential property values nearby, which currently sit in the very affordable range.

Fiesta Mall, at Southern and Alma School in Mesa, also is in the midst of final demolition, leading to another mixed use development featuring multi-family housing, commercial and office space plus restaurants and other attractions.  Likely similar to the Paradise Valley Mall concept, Fiesta Mall has not yet finalized its plans. Rest assured though, residential real estate in adjoining areas, which are also very affordable currently, could get a major boost from this new development.

Stay tuned, we’ll keep a close eye on these trends in the coming years.