The long-delayed American Dream — a mammoth mix of entertainment and retail — is slated to re-open today (Oct. 1) in the New Jersey Meadowlands. It’s the latest development in the roller coaster story of the U.S. mall business stretching from the late pre-COVID era into the future.

Changes accelerate
Changes in the mall landscape, years in the making, accelerated as the pandemic closed malls nationwide and consumers accelerated an ongoing shift toward eCommerce. So mall operators have been including more experiential elements that can’t be duplicated online.

American Dream partially opened in New Jersey last October but ran smack into the pandemic. It has been closed since March, and re-opens with nine of its 20 attractions — including a Nickelodeon Universe amusement park and DreamWorks water park —  and 100 stores (H&M, Primark and others), but is limited to 25% of capacity for the time being. It also lost one tenant when retailer Century 21 closed 13 stores and liquidated.

In a different boat
“If you are Amazon, you are not having a problem right now, but if you are traditional shopping center, you are having a problem,” said Donald Ghermezian, CEO of Triple Five Group, which operates American Dream. “We are in a different boat. We believe that North America is 20 years behind the rest of the world in state-of-the-art [mall] developments. Do people right now want to go back to regular malls now that they have become comfortable with online shopping?  I don’t think so. It comes back to what will take to get people to come out of their houses and feel comfortable. That’s all about driving traffic to our tenants through all the different experiences in entertainment and other components.”

Yet entertainment is but one strategy mall operators are implementing to populate their properties amid rampant retail consolidation. For example, Simon Property Group was reported to considering leasing space to Amazon for use as fulfillment centers.

Among the other developments in recent weeks:

• Simon and Brookfield Property Partners agreed in early September to buy bankrupt J.C. Penney, potentially salvaging a tenant with an eye toward redeveloping some its space for other purposes. Authentic Brands Group, which has partnered with Simon on deals involving Aeropostale and Forever 21, among others, also is said to be involved in the agreement.
• While American Dream is re-opening, Three-Five’s Mall of America in Minneapolis, MN, has struggled financially. It fell months behind on its mortgage payments but reached a cash-management agreement with CWCapital Asset Management in August to avoid foreclosure. The loan was transferred to CWCapital in May.
• Mall operator Centennial Real Estate Co. launched a Shop Now! program earlier this year that allows consumers to shop its seven regional and super-regional malls the same way they would Amazon — shoppers can log in, search for red shoes, and the site will show where in the mall they’re available, with options for home delivery and curbside pickup.
• CBL Properties and Associates, which operates 91 malls, appears poised to file for bankruptcy protection. CBL reached a restructuring support agreement with creditors in August, and recently extended the potential filing deadline to Oct. 15. As stores closed in its malls — at the depths of the pandemic in April and May it was collecting only 25-30% of rents — CBL turned to non-retail tenants such as fitness clubs and medical offices.