Malls will be ‘historical anachronism,’ says Grove mogul Rick Caruso
Indoor malls may have a limited lifespan, according to Rick Caruso, owner of Southland centers including the Grove in the Fairfax district and the Americana at Brand in Glendale.
In a Sunday keynote speech to some 4,000 people at the National Retail Federation’s convention, Caruso said the industry is “on the verge of the rebirth of brick and mortar retail.”
“I’ve come to the conclusion that within 10 to 15 years, the typical U.S. mall, unless completely reinvented, will be seen as a historical anachronism, a 60-year or so aberration that no longer meets the public’s, the consumer’s or the retailer’s needs,” Caruso said at the New York City event.
And it’s not necessarily because of the boom in e-commerce, he said. Though online sales growth during the holiday season far outpaced that of physical retailers, buying via the Internet is an inherently isolated endeavor, according to Caruso.
But today’s shopping malls don’t help alleviate a pervasive sense of loneliness, according to Caruso. Most consumers show up with a specific goal in mind, make their planned purchase and then leave immediately, he said in an interview with the Los Angeles Times on Monday.
“Stores and malls can’t survive when they’re just a destination,” he said. “The amount you’re going to spend is so limited.”
A major new indoor shopping center hasn’t been built since 2006, Caruso said. And a swath of existing ones will likely be torn down, he said.
Many property owners are trying to unload their malls “and are having a very hard time doing it, even in a strong market with a lot of capital,” Caruso said.
The future, he said, is in multi-use projects that offer atmosphere, services, maybe even residential units. It’s a convenient message for billionaire Caruso, whose properties include Vegas-style fountains, trolleys, extensive greenery and hospitality expertise courtesy of Four Seasons Hotel executives.
“When people feel good they spend more money,” he said.
Caruso sees more street-level retail down the line, like what he’s planning for a project in the Pacific Palisades. The property there, where remodeling and building is expected to commence by the end of the year, is “going to look like a 21st century Mayberry,” he said.
He’s not a fan of vertical malls -- shopping centers that are built upward to capitalize on limited real estate. It’s a common sight in compact urban areas in Asia, but Caruso said he’s “not a fan of the skyscraper retail idea and it’s not something I would invest in.”
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