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Home » Property Management » Shopping Center Management: 5 Challenges in 2022 and Beyond

The demand for malls has taken a dip since the pandemic, making it more challenging for mall owners and managers to maintain relevance. In this post, we tackle some of the common challenges in shopping center or mall management you’ll likely see in 2022 and the coming years, and share what you can do to mitigate them.

#1 Spaces That Adapt to Consumer Needs

Commercial tenants aren’t only looking for a place where they can show off their products. That might’ve been the case years ago, but modern-day retailers are in need of spaces that can accommodate their customers’ ever-changing demands. For instance, some stores have reduced the space for shelves, and instead, let their customers collect products they purchased online in-store.

Retail experiences (e.g. curbside pickup, buy online, pick up in-store) matter to customers now more than ever, and they’re constantly on the lookout for companies that do care for reinvention. Your commercial tenants know that to keep up, their space should be able to adapt – that’s why they’d rather rent at a place where making changes isn’t such a challenge.

With that said, you must make sure that all rentable units can be easily manipulated to meet your tenant’s and their customers’ needs. Contract terms should also be flexible, as chances are, your tenants will make alternations multiple times to improve the customer experience.

That, however, doesn’t mean you can be too lenient with your terms. You must make sure that any improvements your tenants make will not adversely impact other tenants or ruin other shoppers’ experiences. More importantly, you must make sure that the upgrades do not make the property less structurally sound (e.g. let’s say a tenant wants to remove a load-bearing wall). An expert real estate lawyer with plenty of experience can advise what clauses to include in your contract.

#2 Staff Turnover

It’s not uncommon for mall management to hire younger employees whom they only pay minimum wage – except for those with administrative roles, of course. While employing minimum-wage workers means more savings, its disadvantage is that your employees aren’t in it for the long term.

The solution would be to employ more “mature” workers, pay them better rates, and offer them benefits such as paid time off (PTO). It will be more expensive, but it’s better than having to train new hires, which can be time-consuming.

Another option is to partner with a shopping mall management company. Not only will they oversee your mall’s day-to-day operations, but they’ll also handle all HR-related matters to make sure your mall staff’s complaints and concerns are heard, and that they’re satisfied with their work. That way, they can prevent employee turnover.

#3 Managing Business Personalities

Managing Business Personalities

Commercial tenants may not be as demanding, but they tend to have “big” personalities. Mall managers have to deal with businesses wanting to do things their way every day. Commercial tenants are also prone to conflict – for instance, if one tenant’s operations disrupt another’s (e.g. they’re blasting loud music), there’s sure to be tension between them. What’s more, many commercial tenants may not agree with your rules and regulations. They may, for instance, open their doors for longer than what’s written in the commercial lease agreement. Instead of ending the day at 8 PM, they might decide to end it at midnight.

As the owner, you have to put your foot down and create policies and procedures that everyone must follow – no matter what. You must be clear about what commercial tenants can and can’t do, and make sure your rules are communicated (and recommunicated) to all concerned.

If you aren’t familiar with common commercial policies, consider partnering with a property management firm in South Florida. They can draft and enforce your rules, and ensure that they’re clearly understood by all your tenants. They can also create a code of conduct to encourage tenants to get along with one another.

#4 Rise of E-Commerce

Foot traffic – without it, your tenants won’t be able to make money and you won’t be able to collect rent. Unfortunately, foot traffic has declined due to the popularity of e-commerce. More and more customers are choosing to shop online for its convenience and cost savings, causing retail centers, shopping malls, and more, to lose shoppers.

So, is in-person shopping a thing of the past? Not at all. E-commerce may be the trend, but that doesn’t mean all hope is lost for brick-and-mortar stores. What they have to do is innovate. They could, for instance, open smaller stores simply to “show off” their products, or open stores where customers can place orders and then collect them when they arrive.

This means that shopping mall owners might consider renting out smaller spaces. Many commercial tenants no longer see the need for massive spaces filled with shelves upon shelves of merchandise.  This, of course, depends on who your tenants are. If in-person shopping still works for them (e.g. they sell fireworks, e-cigarettes, and other things you can’t legally sell online), it would make sense to still rent out more spacious units.

Mall managers should also consider going beyond shopping. With e-commerce on the rise, malls can only stay competitive if they offer something that stores like Amazon can’t. For example, mall managers could rent to more restaurants, wellness centers, etc. to turn the mall into more than a shopping destination.

#5 Companies Are Going Green

Companies Are Going Green

The rise of “green incentives” has encouraged many companies to change their practices and choose locations that support their green initiatives.  In addition, customers are growing more aware of who they support – if they find that a particular brand isn’t practicing sustainability, there’s a good chance they won’t buy from them. No commercial tenant would want to lose customers, so it wouldn’t be a surprise if they’d choose to rent at an eco-friendly building.

If your shopping mall hasn’t gone green, you’ll have to invest in certain upgrades to stay competitive. For instance, you could go solar, replace lights with LED, or purchase Energy Star-certified appliances.

A Shopping Center Management Company Can Handle These Challenges

Managing a mall post-pandemic will be a challenge, but it won’t be impossible. With a commercial property management company by your side, you’ll be able to implement certain changes so you won’t have to shut your shopping center’s doors any time soon. At Luxury Property Care, we’re experts when it comes to resilience (we even started our operations at the peak of the housing crisis). As your partners, we’ll pull out all of the stops to ensure your property’s success. Through our expertise and experience, we can guarantee that your shopping center will survive no matter what.

If you need a helping hand, call us at (561) 944 – 2992 or fill out our contact form. One of our managers will walk you through our shopping center management services.

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