Malls seem like the perfect mixed use type property. Stores on 1 floor, offices on 2nd floor, then 2-3 floors of housing. 1 of the big department stores could be a grocery store.
So these days maybe malls are a perfect fit!
Noise.
Also one US-specific issue is Christmas shopping, which probably drives a lot of the planing. Stores make the most money during a limited interval when they are packed to capacity and need to plan for that.
San Francisco's Stonestown Galleria has a proosal for adding 3,000 housing units, in the outer Sunset: https://www.sfchronicle.com/local/article/Stonestown-Galleri...
San Jose's Santana Row, completed in 2002, has over 1,200 residential units:
https://web.archive.org/web/20170107101031/https://westernit... (PDF)
https://californiatravelmedia.com/wp-content/uploads/2019/12...
South-west side of SF, about as far from downtown as you can get.
Its a stones throw from Daly City so indeed about as far as you can get from downtown heheh.
Edit: which is to say that traditional malls are just terrible because mixed use would be much better. City center buildings, even strip mall buildings, get a bunch of uses. But the scale of traditional suburbans just forces a single use on it.
The surviving stores that used to be anchor candidates seem to be happy being on their own in a sea of dedicated parking.
I wanted to rip my own eyes out.
(The low-key method for normal people is to get “variances” - which are not as impossible to obtain as you may think if you work slowly and quietly on them.)
Far less food waste too, I’d rarely buy more than a bag’s worth of food at a time and would just go shop 3+ times per week.
These people look at the numbers produced by their model and send their money where indicated. It's why Walgreens and CVS will build on two corners of the same intersection. Both have the same traffic counts and same catchment demographics.
Neither interest nor money are a given and the amount of either necessary varies wildly by jurisdiction. Even quite small obstacles can change outcomes a lot. Zoning has quite real effects.
Office + mall examples usually seem to be working fine, except there always are one entrance for each, distanced physically as well as in general aesthetics.
However the truth is literally the opposite.
Every city older than about 100 years is built with mixed use retail and housing.
I encourage you to do some googling
Wait, what?
Other than very old houses (which I've been told had the bathroom in a separate building), every residence I know of has the kitchen and the bathroom in the same building. Yes, they are separated by walls, in the same way housing and commerce in a single building would be separated by walls and floors.
Finally, there is the issue of investment. There are big pots of money for each use...investors who invest in retail, office, and residential. The pots of money for non-conventional projects are much much smaller. One reason is that with mixed use, there are three economic cycles that have to be timed. The retail, office, and housing sectors don't cycle in lock-step.
Your good ideas in real-estate only have legs if you have the money to make them happen. And the time. You're talking a several hundred million dollars and a decade optimistically down the happy path. More likely more since most mall land is already malls and you will have to acquire multiple parcels from multiple owners without them being the wiser and holding out for premium prices.
[1]: Retail uses produce so much income that it makes sense for them to sit vacant for many years instead of converting to some other use.
I agree there are only so many stores a mall can support. At that point the economically sound strategy is to stop building. It's not to layer on incidental complexity that provides lower returns at increased risks. It will only create problems syndicating investors for the project.
[1] Retail was still recovering from over-supply from the S&L pre-crisis and under-demand from the dot.com crash. At the low point of the cycle it could have been perfectly sensible to start planning a retail project on the prediction that retail could only come back and in the hope of timing the up-cycle correctly. But you would not have been building a mall. You would have been planning a power center.
Money people need things as simple as possible to package risk.
A family friend opened a bakery. Finding a storefront was an insane process, in some cases it’s apparent that the landlord doesn’t want to rent out the space, it’s been vacant for 4 years and rent is... aspirational.
Any real-estate pro forma will include a vacancy rate.
If a person owns ten storefronts on a block, discounting one lease sets a lower rate for the nine other leases.
If a business can't afford the lease, that is a problem with its cashflow and/or access to capital relative to its aspirations. Often the landlord can simply take depreciation and meet its IRR targets. Particularly if the landlord is unleveraged. The building and land aren't going anywhere. That's the nature of real property as an asset class.