Investors Return to Enclosed Retail as Consumer Spending Outweighs E-Commerce Fears
Mall values rose 13% over the past year, outpacing all other commercial property sectors and more than doubling the overall commercial real estate price increase, according to Green Street. Shares of Simon Property Group, the country’s largest mall owner, surpassed their 2016 record high in July and beat the S&P 500 over the past 12 months. Paris-based Unibail-Rodamco-Westfield reversed its 2021 plan to exit the U.S. market and committed nearly $1 billion this year to buy out partners at two California malls. CBL Properties, which emerged from bankruptcy protection after the pandemic, has acquired five new properties since July 2025 and saw its stock price jump 48% this year.
Resilient consumer spending and few retailer bankruptcies have stabilized the sector after roughly 200 malls closed since 2008. Mall owners renovated properties and replaced department stores with luxury retailers, restaurants like Din Tai Fung, and entertainment venues less vulnerable to online competition. Morgan Stanley’s head of U.S. REIT and commercial real estate research said malls feel stronger fundamentally than at any point post-Covid. Occupancy and rent growth have held up better than multifamily and office sectors, in part because new retail supply remains limited.
Middle-market properties are performing alongside trophy malls. CBL’s West County Center in St. Louis saw tenant sales increase 13% since 2023 after Nordstrom closed a competing location and Macy’s renovated its anchor store. The company expects to refinance the mall within 60 days after being unable to secure financing in 2022 when the property’s value had declined 30% over the prior decade. Some investors remain cautious, arguing that replacing department stores with entertainment and restaurants creates new tenant-replacement challenges if those tenants close. Mall values still sit well below peak levels from a decade ago.
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