In this articleCAKEFollow your favorite stocksCREATE FREE ACCOUNTEditor’s note: This is the third story in a three-part CNBC series about the future of U.S. shopping malls, as developers transform the spaces to add new retailers, experiences and even apartments. Read the first and second parts.Malls used to be the destination for the buzziest stores. Now they’re home to the hottest restaurants.The slow death of department stores and rise of online shopping have hurt U.S. shopping malls, particularly over the last decade. The once-essential shopping centers have seen their numbers drop from a peak of 2,500 in the 1980s to roughly 700 these days, according to Coresight Research.But now many in the retail industry say that rumors of the mall’s demise have been greatly exaggerated. Many Gen Z consumers prefer to shop in person and love the mall experience. Creative solutions from developers have turned empty department stores into housing, bringing consumers even closer to stores.And landlords are devoting more square footage to restaurants and bars, which have become a bigger draw to visit malls.”It’s been a big shift,” said David Henkes, senior principal at Technomic, a market research firm focused on the restaurant industry. “It used to be that the shopping occasion drove people to the mall and then maybe you grabbed a bite to eat. In a lot of ways, that’s been flipped on its head. Now, the dining options drive people there, and then you’re hoping that they’re going to do a little shopping while they’re there.”Yelp found that 17 of the 25 most popular mall brands, based on consumer interest, were restaurants, according to a report published in October.Going back 10 or 20 years ago, restaurants accounted for only about 5% to 10% of general leasing area in malls operated by Brookfield Properties, according to Chris Brandon, the company’s senior vice president of leasing for eating and drinking retail. That would typically include a food court and several full-service restaurants. That’s changed in recent years.”It’s increased an incredible amount over the last five to 10 years,” Brandon said. “In some of our shopping centers, we’re seeing 20% to 30% of the total [general leasing area] being dedicated to food, and that’s 100% by design.”Brookfield’s portfolio of 129 malls include Tysons Galleria in McLean, Virginia; Christiana Mall in Newark, Delaware; and First Colony Mall in Sugar Land, Texas. Its mall restaurant tenants include more than 540 full-service eateries and around 2,000 fast-casual establishments.More than the food courtBrookfield Properties gave the Staten Island Mall’s food court a facelift in 2018, with an upgraded look and new restaurants.Source: Brookfield PropertiesMore than half a century ago, the Paramus Park shopping mall in New Jersey opened a food court on its second floor, becoming the first example of a successful mall food court in the U.S. A decade later, food courts had become of a staple of the American mall, helping the expansion of chains like …
