The state of strip malls and shopping centers isn’t all doom and gloom, experts say.
“Open-air shopping centers are in a pretty good spot into the future,” said David Caputo, a data scientist with Moody’s Analytics. “There was a lot of concern with the pandemic, but that hasn’t been the case.”
Lower Burrell officials and the community at large are hoping that trend can continue as the auction date looms for Hillcrest Plaza on Leechburg Road.
Hillcrest will be auctioned online between June 10 and 12. Its starting bid is $1.14 million.
Mayor Chris Fabry said the sale is good for the city.
“Now, we have the opportunity to have someone come in and actually fill that and bring in new businesses — and breathe new life into Lower Burrell,” he said.
Strip malls outperform enclosed malls because, Caputo said, they make the customer’s life more convenient.
“Consumers don’t want dark-lit, enclosed malls,” Caputo said. “They want to be out in the open. They want to get in and out of their stores.”
According to its listing, Hillcrest has a 78% occupancy rate, roughly 14% below last year’s national average, 91.8%.
The 2023 vacancy rates for shopping centers in the U.S. were lower than they had been since 2019, said Stephanie Cegielski, vice president of research and public relations for the International Council of Shopping Centers.
“We continue to see robust demand for physical space,” she said.
Within the past year, Hyde Park Plaza in Allegheny Township has opened a Dollar Tree and Ollie’s Bargain Outlet, with an Aldi on the way. Starbucks and Harbor Freight are proposed in New Kensington’s Riverview Plaza.
Successes and challenges of shopping centers depend on numerous factors that differ from center to center, Cegielski said.
“The demographics and psychographics of a community can change, leading to consumers in a certain market to have different needs and values,” she said. “Shopping centers may need to adjust their offerings accordingly, such as achieving a balanced tenant mix that appeals to the current desires of the community.
“In more drastic approaches, some centers reinvent themselves as mixed-use properties — combining several types of real estate like residential, office and retail — to help revitalize surrounding communities and offer new economic opportunities.”
Caputo said there are two main aspects that make a shopping center successful: Its location and the tenants it offers.
Since the covid-19 pandemic, the suburbs have seen more foot traffic, Caputo said. Having a shopping center in a dense, suburban neighborhood can contribute to its success.
Successful shopping centers have tenants where people have to physically go, which can include businesses such as coffee shops or “fast casual dining” restaurants, grocery stores or pharmacies.
Property owners should keep their centers plain and clean to appeal to renters, Caputo said.
Hillcrest was built in 1960 and last renovated in 1993, its auction listing states.
The retail industry also is seeing a new trend of larger department stores undergoing a “smaller-yet-smarter” experiment, Caputo said. After reporting a decline in sales, retailers such as Macy’s are closing their bigger stores and pivoting to opening smaller-footprint, item-focused stores at places such as shopping centers or strip malls.
Online shopping and in-store shopping are “tightly intertwined,” Cegielski said, and “the increase in online shopping has only strengthened physical shopping centers and retail.”
Trends also show online shopping serving as advertising for people to go into a physical store to try out a product in person, Caputo said.
“To appeal to today’s omnichannel consumers, retailers continue to offer innovative services like click-and-collect, the ability to purchase on social media and add-on services or purchases while picking up online orders at the store,” Cegielski said.
Kellen Stepler is a TribLive reporter covering the Allegheny Valley and Burrell school districts and surrounding areas. He joined the Trib in April 2023. He can be reached at kstepler@triblive.com.