Mall reuse is gaining traction across the Midwest as many retail properties continue to experience declining performance. National mall vacancy reached 8.7 percent at the end of 2024 (Capital One Shopping). Broader retail vacancy fell to a 20 year low of 5.3 percent in 2024 which signals a shift away from large enclosed retail formats toward smaller and more adaptable commercial space. Between 2017 and 2022 the United States averaged 1,170 mall closures per year. These indicators show a clear transition in the retail market and highlight the value of redevelopment strategies for aging mall sites.
Many closed or partially active malls are being repositioned for new uses. Nearly half of redeveloped mall sites transition to mixed use programs that include housing, commercial space and community facilities. BSB Design’s urban planners see tremendous potential; Existing infrastructure such as parking areas, utility corridors and circulation networks can create cost efficiencies for phased redevelopment and reduce the amount of required sitework. These efficiencies support long term viability and allow new uses to be introduced as market demand evolves.
Conceptual Mall Redevelopment Site Plan. Click to enlarge.
Three Types of Mall Reuse
Based on current redevelopment patterns across the Midwest and information from our recent planning studies for clients nationwide, mall reuse generally falls into three primary categories.
1. Partial Reuse with Targeted Interventions
Some malls maintain active anchors or inline tenants. Redevelopment focuses on underperforming areas such as vacant wings or peripheral pads. This approach allows new uses to be introduced while existing retail operations remain in place.
2. Selective Structural Reuse
In some communities the mall structure is reconfigured to support a new layout with a combination of retail, commercial space and housing. Portions of the building may be removed or opened to create outward facing storefronts, new street connections or public space. Experiential retail is proving to be a key element of many selective structural reuse projects.
3. Full Site Transformation
Where the building no longer supports current needs the site may be cleared for a complete mixed use district. This strategy uses the value of the land and its access to develop new housing, commercial activity and community amenities within a comprehensive master plan.
These three approaches vary based on tenant conditions, infrastructure constraints and municipal goals but each creates an opportunity to reposition a declining retail asset.
Key Challenges in Mall Reuse
Redeveloping a mall into a successful mixed use district requires addressing four primary challenges that influence feasibility and long term performance.
1. Integrating new functions with existing uses
Many malls still support active tenants. Redevelopment must consider access, traffic circulation and phasing to avoid disruption during construction activity.
2. Balancing economic impacts of land use change
Replacing retail with residential or other uses shifts the tax base and revenue structure. Municipalities may need financing tools or incentives to maintain fiscal stability.
3. Creating a cohesive sense of place
Traditional malls are inward facing and oriented toward vehicles. Mixed use districts require walkable streetscapes, identity driven design and public spaces that establish a recognizable destination.
4. Building community within a former retail environment
Mixed use neighborhoods rely on services and social interaction. Redevelopment must create environments that support daily life and provide experiential commercial activity beyond transactional retail.
5. Leveraging outlots to their maximum potential
Developers with prime outlot space on larger mall reuse projects may be tempted to turn a quick profit. Fast food chains and gas stations will line up to secure this premier street frontage. But consider more integrated commercial uses and amenity areas on outlots, which often prove more advantageous, both on the approvals side and long-term profitability.
Why Mall Sites Fit Regional Redevelopment Needs
Midwest markets often contain large retail properties with strong access, existing utilities and significant acreage. These conditions support mixed use programs that can introduce housing, commercial space and community amenities. Phased development allows flexibility as market demand evolves. Mixed use conversions also diversify land uses which can improve long term resiliency for both municipalities and developers.
BSB Design studies national and regional mall reuse activity to understand how successful strategies can support a variety of markets. Our experience in mixed use planning, multifamily design and commercial redevelopment positions us to support feasibility studies, early concept evaluations and long term redevelopment frameworks.
Mall reuse offers an opportunity to realign underperforming retail properties with current market needs. For stakeholders considering adaptive reuse across the Midwest, our team is prepared to collaborate throughout the planning and design process.
