As the country eases out of lockdowns and shoppers once again flock to malls, there has been a surge of luxury tenant developments in U.S. shopping centers, especially in outlying, suburban and resort-oriented locations. With more work-from-home employees choosing to remain in their suburban enclaves, and with home prices soaring in value as a result, this segment of the population is now flush with cash thanks to available equity.
Upscale brands are going where their customers are, which is why so many malls outside of urban cores are now opening up luxury tenants such as Hermes, Burberry and Life Time. Slowly but surely there are also more social occasions which require customers to shop for top notch apparel, housewares and gifts, which have all boosted traffic to these luxury tenants. Plus, increased travel is bringing international shoppers to these destination shopping centers. Consequently, the luxury sector is booming, as these recent mall activities have proven. Look for shopping centers in California, Miami and Scottsdale, Ariz., to feature new luxury tenants and restaurants over the next few years.
The Westfield Topanga & The Village mall, owned and managed by Unibail-Rodamco-Westfield (URW) and located in Canoga Park, Calif., a suburb in the San Fernando Valley region of Los Angeles, is redeveloping its former Sears site to house upscale tenants such as Hermes, Arhaus and Pinstripes.
Arhaus expects its 20,734-s.f. showroom to be complete by mid-2022, while the 7,500-s.f. Hermes store will open by 2023. The Pinstripes entertainment/dining venue, expected to be approximately 28,000 s.f., will feature upscale dining, bowing and bocce ball, and is anticipating a mid-2022 opening. The Sears space is also slated to feature an indoor and outdoor chef-driven food hall, which should be complete by mid-2022. The mall is home to other high-end tenants, including Neiman Marcus, Louis Vuitton and Burberry.
In a suburb of Sacramento, Calif., at a URW property, Westfield Galleria at Roseville, luxury tenants have been on an upswing. Gucci will be opening a 5,268-s.f. unit by early to mid-2022, and Louis Vuitton, which occupies a 3,699-s.f. space in the mall, expects to move to a larger 5,801-s.f. space by 2022. The space currently houses a Tiffany & Co., which expects to move into another newly remodeled unit in the mall. Another luxury tenant, Saint Laurent, opened a 4,507-s.f. unit in the mall in September, and Cinemark, the upscale movie theater featuring premium seating, just opened in November. The mall’s luxury segment has benefited from a population growth in Roseville, partially due to the exodus of those escaping the strict COVID-related lockdowns in nearby San Francisco, located about 100 miles away.
At the Bal Harbour Shops mall, owned and developed by Whitman Family Development and located in Bal Harbour, a suburb of Miami, development is underway for both a new wing, as well as a third level, in order to house up to 40 new luxury tenants and restaurants. In total, the renovations will add approximately 241,600 s.f. to the mall’s total space. New upscale retailers will include Roberto Cavalli, Burberry, Bally, jeweler Vhernier and Mediterranean restaurant Aba. The mall already features a wide plethora of luxury tenants, such as Alexander McQueen, Chanel and Bvlgari. As of last month, the owner of two Italian-themed restaurants that were also slated open, Felice and Sant Ambroeus, sued the mall’s owner in hopes of rescinding the leases due to rising construction buildout costs.
The Scottsdale Fashion Square Mall in Scottsdale, owned and operated by Macerich, continues to add new upscale tenants at the luxury wing of its mall, which was completed in late 2018. The high-end health resort, Life Time, will be opening a three-story, 40,000-s.f. building next to the entrance of the luxury wing by 2023. Life Time was buoyed by the news that a mixed-use development is also in the works at a parcel on the north side of the mall, which will encompass seven acres and is expected to provide a steady stream of customers to the gym. The Fashion Square Mall will also house the state’s first Christian Louboutin store, slated to open in the spring of 2022. This comes on the heels of the mall also opening Arizona’s first Dior store in July, an 11,000-s.f. unit that covers two levels. Other notable luxury tenants in the mall include Versace, Tiffany & Co. and high-end restaurant Nobu.
