The American mall was once considered a dying relic of the pre-internet era, battered by e-commerce, shifting consumer habits and the collapse of traditional department stores.
But in Las Vegas and across the country, many malls are finding new life by reinventing themselves as destinations for entertainment, dining, fitness and community experiences — a transformation that industry experts say is being fueled in part by Generation Z.
“Habits have changed. What we buy and how we buy it has changed. The internet has disrupted pretty much everything, and in retail that means e-commerce,” said Steve Neiger, president of the Southern Nevada chapter of commercial real estate association NAIOP. “But there are some things that the internet is never going to be able to replicate.”
The pandemic may have accelerated consumers’ desire for connection and shared experiences, Neiger said, creating new opportunities for commercial real estate developers willing to rethink the traditional shopping mall.
Rather than disappearing, malls are evolving. Across the country and in Southern Nevada, developers are repurposing aging retail centers into mixed-use destinations that combine shopping with entertainment, dining, fitness, housing and community gathering spaces. At the same time, Gen Z consumers are showing a renewed interest in in-person shopping and social experiences, helping drive a broader reinvention of the mall model.
Suburban malls nationwide are being reshaped around those changing preferences. Developers are moving away from a reliance on big-box retailers and department store anchors in favor of a wider mix of uses designed to generate foot traffic throughout the day.
The shift is part of a broader trend that accelerated during and after the pandemic, when remote work and changing consumer habits forced property owners to rethink underperforming commercial spaces. New concepts such as experiential retail, “shoppertainment” and competitive socializing have emerged as major draws, particularly among younger consumers.
Las Vegas’ east side offers one example of that transformation.
The area has experienced a wave of commercial reinvestment after years of retail decline, said Neiger, who also serves as managing principal at Cast Capital Partners. New projects increasingly blend restaurants, fitness centers, entertainment venues and residential components.
Former department stores are also being given new purposes.
One of the most prominent examples is the former Sears building at Boulevard Mall on South Maryland Parkway, said Deana Marcello, executive vice president of retail services at Colliers.
The former anchor space now houses United Education Institute, Precision Opinion, Public Storage and Sage Truck Driving School.
“This is a strong example of taking retail space that no longer serves traditional consumers and repositioning it with uses that benefit the community through job creation, education and needed services,” Marcello said. “That said, the remaining mall portion, more than 50 acres, still lacks a clear long-term vision. It does present a significant opportunity for future mixed-use redevelopment.”
Marcello pointed to a similar transformation at Meadows Mall, where the former Sears location has been converted into Round1 Bowling & Entertainment and Nellis Auction.
“It reflects a shift toward entertainment and value-oriented retail,” she said.
What’s happening to malls?
Vacancy rates at Las Vegas malls have increased from 3.8% in early 2021 to 6.9% today. Yet Danny Khalil, director of market analytics for CoStar Group, said those numbers only tell part of the story.
In fact, he noted that Las Vegas mall vacancy peaked at roughly 7.5% in 2017.
Some malls have recovered by adapting to new consumer demands, while others continue to struggle.
“For every example of a mall that has been successfully redeveloped, there is often another mall — or two — that is still struggling with the traditional model of an indoor shopping center,” Khalil said.
The most successful projects have evolved into what Khalil describes as a “modern arcade,” offering visitors reasons to leave their homes and spend time with friends and family.
That strategy appears to align with broader national trends.
A recent study, “The Death and Reinvention of American Malls,” published by the Michigan Journal of Economics, found that while online shopping devastated many traditional mall anchors, younger consumers may be helping revive the format.
The study notes that shoppers ages 18 to 24 made 62% of their general merchandise purchases in physical stores last year.
Researchers found that many younger consumers value the ability to try on products, receive immediate gratification and spend time with friends in person.
“After the pandemic, Gen Z shoppers have shown an increased interest in demand for in-person social retail experiences,” the report states.
The study cites clothing retailer Edikted, which began as an online-only brand before opening physical mall locations in response to customer demand.
“Overall, while many malls have struggled to adapt to e-commerce, changes post-COVID and bankruptcies, the industry might be making a comeback,” the report concludes. “Malls are adapting to consumer demand rather than disappearing entirely.”
The Las Vegas model
Many of the trends reshaping malls nationally are already visible in Downtown Summerlin.
Marcello said the open-air retail district has spent years focusing on customer experience, community programming and tenant diversification.
“Landlords are replacing former department stores with entertainment, fitness and food-driven concepts to create more engaging environments,” she said. “Downtown Summerlin is a strong local example, continuing to drive traffic through new concepts and community-focused programming.”
Over the past decade, Downtown Summerlin has continually refreshed its tenant mix, adding brands such as Lego, Chanel Fragrance & Beauty, Alo, BYLT and Garage.
The property also hosts farmers markets, fitness classes, festivals and family-friendly events that help create a sense of community beyond shopping.
Marcello said nearby apartment developments have helped fuel the district’s success by providing a built-in customer base and reinforcing Downtown Summerlin’s position as both a retail center and lifestyle destination.
Meanwhile, lower-tier retail properties across the valley continue to be repositioned into mixed-use developments, while top-performing centers maintain low vacancy rates by adapting to evolving consumer preferences.
“Class A retail remains strong, with low vacancy and stable rents,” Marcello said. “Consumers still predominantly shop in-store, accounting for roughly 80% of retail sales, reinforcing the importance of well-located physical retail.”
Marcello believes Las Vegas is particularly well-positioned because of its long-standing emphasis on experiential entertainment.
“What’s most exciting is the sustained interest from both tenants and investors,” she said. “Las Vegas has evolved from what was once viewed as a tertiary market into a primary target for retail expansion and capital, which will continue to support long-term economic growth and retail performance.”
In many ways, that evolution reflects the future of the American mall. The malls attracting customers today are not trying to compete with online shopping. Instead, they are offering something the internet cannot: a place to gather, socialize and experience a sense of community — the very qualities drawing a new generation of shoppers back through their doors.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
