Walmart Buys a Mall and Tenants Feel Lost

Walmart has entered the real estate business by purchasing a Pittsburgh-area mall.

News of the $34 million acquisition first broke in February, and eight months later, it’s still not quite clear what the retail giant plans to do with the Monroeville Mall, according to a Monday (Oct. 6) New York Times (NYT) report. Tenants, however, are worried about their new landlord.

“The entire community has no idea what’s going on,” Rick Murray, owner of SpectroDolce Confectionery on the mall’s second floor, told the NYT.

However, his store’s sales have fallen “drastically” since the news broke in February that Walmart bought the mall, with people assuming the shopping center had already closed.

David Wang, owner of the mall’s Hibachi Steakhouse & Sushi Bar, said that he and other tenants met in July with Cypress Equities, Walmart’s partner on the project, and learned they had until the end of April 2027 to vacate so the mall could be torn down.

In its place, he said, Walmart would build a new store and a Sam’s Club, part of an open-air shopping center that would feature a skating rink, shops and restaurants.

A spokesman for Walmart, Mark Rickel, told the NYT via email that the retailer “is very interested in being part of any future redevelopment of this site.” The report notes that this is a statement the company has been sharing for months.

Brandon Svec, national director of U.S. retail analytics at real estate data and analytics firm.

CoStar Group, told the NYT that this appears to be Walmart’s first attempt to mount the real estate strategy it first publicized in 2018, when it said it would develop town centers by turning some of its parking lots into green and common areas and adding local businesses.

PYMNTS reported on the purchase when it was first announced, noting that both Walmart and rival Amazon were interested in America’s malls. In the case of Amazon, that’s meant turning struggling malls into distribution centers.

“Between 2016 and 2019, Amazon converted around 25 malls, and it also explored turning former department stores into distribution hubs,” PYMNTS wrote.

“As many malls face declining cash flow and closures, selling them as land for redevelopment became an appealing option.”

Mall expert Paco Underhill told PYMNTS earlier this year that malls are facing challenges ranging from vacancies, dwindling foot traffic and increased eCommerce competition.

He believes there will be more mixed-use developments where malls function as hubs for various activities beyond shopping, including housing, offices, healthcare facilities and even government buildings.