Over the past few weeks we’ve been talking about the future of the mall on this blog. It’s a topic that I’m very interested in.

Yesterday the Wall Street Journal published an article talking about the trend of converting retail/shopping facilities to logistic centers. 

Here’s an excerpt:

“In Mesquite, Texas, FedEx Corp. next month will open a 340,000 square-foot distribution facility on what once was the site of the former Big Town Mall. Located along U.S. Highway 80 in Texas, the mall declined after newer malls were built nearby. It was demolished in 2006 and the land was later rezoned for industrial use.”

It turns – and we’ve talked about this – that good retail locations are also good distribution locations. They are usually located close to humans and infrastructure.

Here’s another example from the article:

In North Randall, Ohio, Amazon.com Inc. is considering the site of the former Randall Park Mall as a fulfillment center, according to Port of Cleveland, a local government agency focused on spurring job creation and economic growth in Cuyahoga County. Amazon didn’t immediately respond to requests for comment.

For a short time when it opened in 1976, Randall Park Mall was the largest shopping center in the world and had been “a thriving heartbeat” for the local economy, according to Mr. Davis. But the mall closed in 2009 as stores struggled with fewer shoppers.

Assuming this trend continues and people continue to buy things online, one has to wonder about the placemaking that should or needs to happen in these areas.

The Globe and Mail recently published an excellent article on “how e-commerce is driving a real estate revolution.” This is a topic that I’m very interested in: how online manifests itself offline.

Not surprisingly, the article talks a lot about Amazon, including their 4th warehouse in the Greater Toronto Area, which is an 850,000 square foot facility in Brampton equipped with 350-pound robots (8050 Heritage Road).

The first thing I did after reading the article was figure out the location of all of Amazon’s fulfillment centers in the GTA. Amazon doesn’t seem to publish this. But according to TaxJar, they are here (I mapped out the addresses):

There are two in Brampton at the precise location where Hwy 407 (toll route) and Hwy 401 meet. The other three are distributed along Hwy 401 in Milton and in Mississauga.

Now let’s get back to that Globe and Mail article:

- In 6 years, Amazon has leased over 2 million square feet of warehouse space in Canada.

- Toronto is the third largest warehouse market in North America. It represents 43% of Canada’s total inventory.

- Average net rents have increased 9.7% over the past year and vacancy rates have dropped to 2.7% (CBRE data). In Vancouver, those same numbers are 5.1% and 3%, respectively.

- Online shopping is thought to account for about 6.5% of all retail sales in Canada. But in Toronto, 23% of all industrial space is already e-commerce-related (CBRE data, again).

- CBRE believes that every $1 billion in new online sales per year requires an additional 1.25 million square feet of warehouse space. 

- Based on online sales projections, Canada needs another 27.5 million square feet of industrial space over the next 5 years. We don’t have that much space in the pipeline.

- Clear heights are increasing for stacking purposes. Amazon’s new Brampton facility is 45 feet tall / 4 floors. 10 years ago new warehouses were 26 feet tall.

- Average sale price of warehouses in the GTA has gone from $119.35 psf to $142.19 psf over the last year.

Perhaps the most interesting takeaway from the article is the discussion around “last mile” distribution hubs. These are fulfillment centers located closer to the city, which are used to offer shorter delivery times: 

“…instead of having inventory stored for days or months, these fulfilment centres will turn over their inventory in one day, sometimes twice a day.”

This is something that I addressed in my recent presentation about the “mall of the future” at B+H’s retail design charrette. Where do these physical distribution centers want to be as online sales continue to grow and delivery times continue to compress? Where’s the future growth?

According to this article, it’s going to be in “last mile” fulfillment real estate – relatively smaller spaces that are located very close or directly in the city center.

Photo by Samuel Zeller on Unsplash

This morning I gave a presentation and participated in a design charrette that was organized by B+H Advance Strategy about the “mall of the future.” (See photo above.) It’s a 2-day event and I was only able to stick around for a few hours in the morning, but I think it’s great that B+H Architects takes the time to research and get a deeper level of understanding in the areas in which they work. Great design demands that.

The way the charrette was structured was around a handful of future scenarios. The idea being that it’s impossible to accurately predict the future, but it is possible to play out different possible futures to see what you get. I’m looking forward to seeing what the teams ultimately come up with at the end. I would also be really curious to hear your thoughts in the comment section below.

But before we decide on what malls are going to become in the future, it’s perhaps useful to think about how they got their start. The man largely credited with inventing the fully enclosed mall typology is a man by the name of Victor Gruen. He was a Vienna-born architect who moved to the US in 1938. 

In the words of Malcolm Gladwell:

“Fifty years ago, Victor Gruen designed a fully enclosed, introverted, multitiered, double-anchor-tenant shopping complex with a garden court under a skylight—and today virtually every regional shopping center in America is a fully enclosed, introverted, multitiered, double-anchor-tenant complex with a garden court under a skylight. Victor Gruen didn’t design a building; he designed an archetype.”

The most interesting thing about this story though is that Gruen’s initial hope was that the mall would urbanize America’s suburbs. The garden court was supposed to be a kind of town square. And his broader vision included a mix of higher density uses surrounding the perimeter. But in reality the opposite happened: The mall helped to further suburbanize America.

However, as our malls begin to show their age (or die) and as we relearn to appreciate walkable urban environments, mall landlords are increasingly thinking mixed-use and higher density. And ironically, many of the plans probably don’t look all that dissimilar to Gruen’s original ideas. So maybe one possible future is simply the one that Gruen wanted to create all along.

Image: Kinetic Commerce

Over the past few weeks we’ve been talking about the future of the mall on this blog. It’s a topic that I’m very interested in.

Yesterday the Wall Street Journal published an article talking about the trend of converting retail/shopping facilities to logistic centers. 

Here’s an excerpt:

“In Mesquite, Texas, FedEx Corp. next month will open a 340,000 square-foot distribution facility on what once was the site of the former Big Town Mall. Located along U.S. Highway 80 in Texas, the mall declined after newer malls were built nearby. It was demolished in 2006 and the land was later rezoned for industrial use.”

It turns – and we’ve talked about this – that good retail locations are also good distribution locations. They are usually located close to humans and infrastructure.

Here’s another example from the article:

In North Randall, Ohio, Amazon.com Inc. is considering the site of the former Randall Park Mall as a fulfillment center, according to Port of Cleveland, a local government agency focused on spurring job creation and economic growth in Cuyahoga County. Amazon didn’t immediately respond to requests for comment.

For a short time when it opened in 1976, Randall Park Mall was the largest shopping center in the world and had been “a thriving heartbeat” for the local economy, according to Mr. Davis. But the mall closed in 2009 as stores struggled with fewer shoppers.

Assuming this trend continues and people continue to buy things online, one has to wonder about the placemaking that should or needs to happen in these areas.

The Globe and Mail recently published an excellent article on “how e-commerce is driving a real estate revolution.” This is a topic that I’m very interested in: how online manifests itself offline.

Not surprisingly, the article talks a lot about Amazon, including their 4th warehouse in the Greater Toronto Area, which is an 850,000 square foot facility in Brampton equipped with 350-pound robots (8050 Heritage Road).

The first thing I did after reading the article was figure out the location of all of Amazon’s fulfillment centers in the GTA. Amazon doesn’t seem to publish this. But according to TaxJar, they are here (I mapped out the addresses):

There are two in Brampton at the precise location where Hwy 407 (toll route) and Hwy 401 meet. The other three are distributed along Hwy 401 in Milton and in Mississauga.

Now let’s get back to that Globe and Mail article:

- In 6 years, Amazon has leased over 2 million square feet of warehouse space in Canada.

- Toronto is the third largest warehouse market in North America. It represents 43% of Canada’s total inventory.

- Average net rents have increased 9.7% over the past year and vacancy rates have dropped to 2.7% (CBRE data). In Vancouver, those same numbers are 5.1% and 3%, respectively.

- Online shopping is thought to account for about 6.5% of all retail sales in Canada. But in Toronto, 23% of all industrial space is already e-commerce-related (CBRE data, again).

- CBRE believes that every $1 billion in new online sales per year requires an additional 1.25 million square feet of warehouse space. 

- Based on online sales projections, Canada needs another 27.5 million square feet of industrial space over the next 5 years. We don’t have that much space in the pipeline.

- Clear heights are increasing for stacking purposes. Amazon’s new Brampton facility is 45 feet tall / 4 floors. 10 years ago new warehouses were 26 feet tall.

- Average sale price of warehouses in the GTA has gone from $119.35 psf to $142.19 psf over the last year.

Perhaps the most interesting takeaway from the article is the discussion around “last mile” distribution hubs. These are fulfillment centers located closer to the city, which are used to offer shorter delivery times: 

“…instead of having inventory stored for days or months, these fulfilment centres will turn over their inventory in one day, sometimes twice a day.”

This is something that I addressed in my recent presentation about the “mall of the future” at B+H’s retail design charrette. Where do these physical distribution centers want to be as online sales continue to grow and delivery times continue to compress? Where’s the future growth?

According to this article, it’s going to be in “last mile” fulfillment real estate – relatively smaller spaces that are located very close or directly in the city center.

Photo by Samuel Zeller on Unsplash

This morning I gave a presentation and participated in a design charrette that was organized by B+H Advance Strategy about the “mall of the future.” (See photo above.) It’s a 2-day event and I was only able to stick around for a few hours in the morning, but I think it’s great that B+H Architects takes the time to research and get a deeper level of understanding in the areas in which they work. Great design demands that.

The way the charrette was structured was around a handful of future scenarios. The idea being that it’s impossible to accurately predict the future, but it is possible to play out different possible futures to see what you get. I’m looking forward to seeing what the teams ultimately come up with at the end. I would also be really curious to hear your thoughts in the comment section below.

But before we decide on what malls are going to become in the future, it’s perhaps useful to think about how they got their start. The man largely credited with inventing the fully enclosed mall typology is a man by the name of Victor Gruen. He was a Vienna-born architect who moved to the US in 1938. 

In the words of Malcolm Gladwell:

“Fifty years ago, Victor Gruen designed a fully enclosed, introverted, multitiered, double-anchor-tenant shopping complex with a garden court under a skylight—and today virtually every regional shopping center in America is a fully enclosed, introverted, multitiered, double-anchor-tenant complex with a garden court under a skylight. Victor Gruen didn’t design a building; he designed an archetype.”

The most interesting thing about this story though is that Gruen’s initial hope was that the mall would urbanize America’s suburbs. The garden court was supposed to be a kind of town square. And his broader vision included a mix of higher density uses surrounding the perimeter. But in reality the opposite happened: The mall helped to further suburbanize America.

However, as our malls begin to show their age (or die) and as we relearn to appreciate walkable urban environments, mall landlords are increasingly thinking mixed-use and higher density. And ironically, many of the plans probably don’t look all that dissimilar to Gruen’s original ideas. So maybe one possible future is simply the one that Gruen wanted to create all along.

Image: Kinetic Commerce