The Reinvention of Retail
January 13, 2026
Fifteen years ago, the American retail landscape looked a lot different than it does today. Shopping centers were built around traditional department store anchors (JCPenney, Sears, Macy’s, Bradley’s) and surrounded by a predictable mix of Payless Shoes, RadioShack, and other value chains that hadn’t evolved much since the 1970s.
The mall was a cultural hub, and foot traffic was almost guaranteed, since it’s where people went when they were bored on a Saturday, or when they needed to buy a new pair of shoes. But it was designed for a consumer with vastly different expectations than today.
Contrary to what media headlines want us to think, shopping centers and malls aren’t disappearing (in fact, shopping center vacancies are at their lowest in two decades). They’re undergoing a huge transformation, and that impacts how CRE investors think, underwrite, and plan.
Takeaways:
- The anchor model has permanently shifted.
- Foot traffic drives value, no matter what type of tenant it is.
- Open-air design has a competitive advantage.
New Shopping Center Anchors
Instead of department stores, mall anchors are now more likely to be:
- Experiential: movie theaters with dine-in formats, immersive gaming, climbing gyms, escape rooms
- Health & Wellness: boutique fitness, medical clinics, orthodontics, urgent care, physical therapy
- Food: chef-driven restaurants, food halls, curated dining clusters (Note: Grocery store anchors increased by 12% in the last five years).
- Discount Stores: TJX brands, Burlington, Five Below, Dollar General
Consumers are still coming to malls and shopping centers, but they’re coming because they’re looking for things that can’t be delivered by Amazon.
What This Means for CRE
The new anchor is multi-category, which means a single tenant is not likely to replace Sears or Macy’s at 100,000+ square feet.
Instead, anchors are probably multiple storefronts (like medical + fitness). The important thing is to keep daily foot traffic constant, not to have one brand drive the whole identity of a shopping center.
Investors make a mistake when they focus on rent bumps for one tenant instead of trying to attract multiple anchors. The focus should be on modernizing old spaces, incorporating technology whenever possible, and subdividing anchor spaces into tenant bays.
A Note on Service Tenants
Businesses like gyms, healthcare offices, pet stores, and kids’ enrichment centers are businesses that attract recurring revenue and long-term memberships, and aren’t able to be replaced by an online option.
It can be hard to shift our idea of what a “mall” looks like when it used to be defined by clothing stores, but we need to be open to reimaging these spaces filled with service tenants, which have predictable margins.
Outdoor Spaces
Open-air centers in high-growth markets such as Phoenix, Nashville and Austin, Texas, are leading the retail resurgence.
Consumers are craving open space and outdoor space, so as retail centers are being redesigned, this should be top of mind. Even largely indoor shopping centers should integrate elements like plazas, walkable courtyards, and landscape design.
Conclusion
Traditional retail anchors like Sears (soon down to just five locations), JCPenney (closing eight locations this year), and Macy’s (closing 150 stores by the end of next year) continue to downsize or close. But that doesn’t mean the mall is dead.
Yesterday’s malls were about brands, and tomorrow’s malls are about experiences.
Retail investment is happening. For example, the developer of Tysons Corner Center outside Washington, D.C. recently announced plans for a $100 million investment in renovations, and The Mall of America in Minnesota is building a $432 million indoor water park to open in 2029.
Research shows that consumers spend much more per visit in-store than online. We’re at a pivotal and exciting moment for investing right now, because as some malls close, it opens up opportunities to create successful new retail spaces, with a very durable upside.
About Jack Mullen of Summer Street Advisors:
As Founder & Managing Director of Summer Street Advisors, Jack Mullen leverages decades of experience in valuation, underwriting, and risk management to lead multi-million and multi-billion dollar CRE transactions.
Previously with GE Capital and large institutional banks, he has shaped investment strategies for some of the industry’s largest deals. A recognized leader, his insights are featured in GlobeSt.com and CREFC Finance World, and he is a sought-after speaker at industry conferences and top universities.
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