Malls Making a Comeback? Simon Property Group Says They Are

The mall, once seen as a relic of a bygone retail era, is once again gaining relevance — especially as younger consumers rediscover its value, according to David Simon, CEO of real estate investment trust Simon Property Group.

“The mall continues to be a unique gathering place,” Simon explained during the company’s recent third-quarter earnings call. “We’re seeing a rejuvenation of the younger consumers wanting to hang out at the mall. And I think it’s our obligation, both for us and our investors, and also for the retailers, to really highlight that.”

Simon Property Group, the largest U.S. mall operator, is investing heavily in both its physical spaces and its digital presence to adapt to changing consumer behaviors, Simon said.

A key part of this strategy, he said, is the recognition that, for many younger shoppers, malls are no longer just about purchasing goods — they’re about community.

“We want to reaffirm the positive nature about what our product means to the community, means to our retailers as we go on, and we can’t ignore digital,” Simon said. “We don’t have unlimited budgets like the tech companies. At the same time, digital is important. So 15% of commerce is digital, and we think we can play a role in that. We think the best way to do that is through ShopSimon.”

Bringing Digital to the Mall

ShopSimon is designed to provide seamless shopping experiences online and in-store. As Simon looks to bridge the gap between eCommerce and brick-and-mortar, the next step is offering additional services that cater to consumer convenience and loyalty.

As Simon Property Group adapts, it recognizes the importance of engaging the younger, experience-driven generation. This demographic, especially Gen Z, has turned to the mall as a place to socialize, gather and explore new experiences.

With this in mind, in September the company launched a new marketing campaign aimed specifically at drawing Gen Z back into its malls. The initiative, “Meet Me @ The Mall,” is designed to engage younger consumers by showcasing the variety of experiences and activities Simon malls offer, beyond just shopping.

Earlier this year, PYMNTS reported on Gen Z’s growing interest in malls.

“Malls serve as spaces where young consumers can meet up with friends, socialize and engage in activities together,” PYMNTS wrote. “They offer a variety of entertainment options, such as movie theaters, arcades and food courts, which make them attractive destinations for social gatherings.”

Additionally, PYMNTS Intelligence data reveals 71% of consumers prefer to engage with physical retail locations at some point during their shopping journey, whether that means shopping in stores or purchasing goods online for on-site pickup.

Simon Property Group’s approach goes beyond simply attracting shoppers — it’s about reimagining the mall experience. This vision is being realized through redevelopment efforts that focus on creating destinations that serve as retail hubs and community spaces.

The company’s $4 billion pipeline, Simon said, includes a mixture of mixed-use developments and residential projects alongside retail. A portion of this will focus on reimagining anchor stores like former Sears and JCPenney stores into multipurpose spaces that blend residential units, offices and retail.

Simon reported a liquidity position of $11.1 billion. Occupancy across its U.S. malls and premium outlets stood at 96.2%, a one-point increase from the same period last year. Additionally, retailer sales per square foot averaged $737 for the 12 months ending Sept. 30, compared to $741 per square foot for the 12 months ending June 30.

“The good news is supply and demand is in our favor,” Simon said. “We have the capital to invest in our portfolio to make it better and overcome the unbelievable rise in construction costs.

“Our job is to continue to improve the merchandise mix at our real estate. It’s really what is the right retail tenant. … Our job is to make the properties better and not just focus on the highest rent per square foot we can get.”