Three tristate malls are getting facelifts in an unexpected way.
Urban Edge Properties will add residential space to the Bergen Town Center in Paramus and to the Yonkers Gateway Center, according to an investor presentation. The firm also plans to “de-mall” the interior of its Hudson Mall in Jersey City to add industrial and self-storage space.
Future site plan of the Bergen Town Center in Paramus (Urban Edge)
Adding housing, self-storage and warehouse space would have been unthinkable when malls were king of the retail world, but the once-dominant retail properties have struggled with the rise of e-commerce and other changing consumer habits. On top of that, the pandemic delivered a major blow, especially to traditional indoor malls, while at the same time juicing the residential, industrial and storage markets.
With the push for last-mile delivery space, industrial real estate has become increasingly needed by retailers and distributors. More than 50 percent of industrial space under construction in the Northeast has already been leased, according to a report by JLL.
Malls have continued to struggle in recent months as visitors failed to return to pre-pandemic levels. In New York City, many malls in the five boroughs have continued to see foot traffic fall below where it was in 2019, despite lifted restrictions.
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Urban Edge owns 76 properties with 15.1 million square feet of retail space. The company reported nearly $12 million in net income in the second quarter of 2021, compared to $32 million during the same time period in 2020, according to earnings reports.
Urban Edge did not respond to requests for comment.
Other mall owners have similarly converted portions of former assets to residential. At the Alderwood Mall outside Seattle, Brookfield Properties partnered with AvalonBay Communities to add 300 apartment units to the property.
Long Island Builders Institute CEO Mitchell Pally last year encouraged such redevelopments for local sites.