Select Sacramento Region Retail Leases

The US had 1,400 malls in 2016 and that was down to just 1,250 by 2020. Roughly 350 of those are Class A malls where sales levels average $600 per square foot (PSF) or more. Those premier and trophy centers have been driving more than 70% of all sales for the sector and they have become the primary focal point of tenant mall demand. For the remaining 900 +/- enclosed malls in the US (Class B and C properties) the situation has become one of evolution vs. extinction. Including Sunrise Mall, we are currently tracking over 400 projects across the US undergoing some sort of redevelopment or reimagining. These are overwhelmingly projects that are primarily being transformed into mixed-use lifestyle centers with significantly reduced retail components but feature the addition of housing and typically some additional mix of hospitality, office, medical or other uses. These shifts densify centers and also allow them to pivot retail tenancy towards uses that are more eCommerce resistant—restaurants, grocery stores, entertainment concepts, personal needs retail, etc., while still leaving space for new, relevant up-and-coming chains.

The Sunrise Mall plan currently calls for creating a walkable “Main Street” outdoor retail district where the main body of the existing enclosed mall currently is situated. Plans call for the reimagined center to have 320,000 SF of retail, 2,220 residential units, 450,000 SF of

Sacramento Retail Market Shopping Centers Q2 2023

Sacramento Retail Market: Supply/Demand/Vacancy

community/institutional uses, up to 960,000 Sf of office space and up to 480 hotel rooms with phased development over the next 20 years.

Incidentally, within Sacramento and Placer Counties there were six malls as recently as 15 years ago: Arden Fair, Roseville Galleria, Country Club Plaza. Sunrise Mall, Downtown Plaza, and Florin Mall. Country Club Plaza and Florin Mall were converted to Power Centers in the 2000s. Downtown Plaza is now DoCo, the lifestyle/entertainment center that is home to Golden 1 Center. Sunrise is up next.

Emblematic of these shifts would be fact that in Q2 mall retailer Tommy Bahama decided not to renew its lease at the Roseville Galleria and is moving across the street to outdoor lifestyle center The Fountains.