Introduction

American malls are moving into a structurally stronger phase with occupancy rates, base rents and NOI all trending upward. Over the longer term, however, we expect this momentum to increasingly concentrate in top-tier, well-located malls. These assets stand to benefit from a structurally tight supply of new retail real estate, strong retailer demand for prime physical locations and mall owners’ ability to redeploy vacant space from legacy bankruptcies into high-return, productive uses.

At the same time, multiple demand-side factors are accelerating this divergence. Luxury brands are actively expanding, and spending among higher-income consumers has held up well despite broader economic pressures. Meanwhile, Gen Z’s strong preference for in-person experiences works in favor of malls with well-curated tenants, which includes some mid-tier malls.

Taken together, the sector’s outlook is as promising as it has been in over a decade. We believe operators with prime assets at strategic locations are best positioned to attract tenants, capital and consumers, driving the next chapter of physical retail.

In this report, “top-tier malls” are those that feature luxury retailers and newer direct-to-consumer (DTC) brands, and are often located in more affluent areas. “Non-top-tier” malls include mid-tier malls in addition to lower-tier malls that may be underperforming. See the Notes and Methodology section at the end of this report for further details and definitions.

The American Mall Renaissance: Coresight Research Analysis

1. Health of the American Mall

Occupancy Rates

Quarterly occupancy data from the National Council of Real Estate Investment Fiduciaries (NCREIF) and the International Council of Shopping Centers (ICSC) show that US mall occupancy has been on an upward trajectory. Occupancy rates rebounded from a post pandemic low of 85.0% in early 2022 to a peak of 90.7% by mid-2025. This indicates that leasing demand has remained resilient, supported by a tight supply environment and the continued appetite of retailers in growth categories to secure quality space. Even as individual tenant bankruptcies generated periodic vacancies, strong re-leasing activity has kept overall occupancy on an upward trend. Later in this report, we show how occupancy rates break down for top-tier operators and their non-top-tier counterparts (Figure 4).

Figure 1.
US Malls: Quarterly Occupancy Rates (% Leased)

Source: NCREIF/ICSC

 

Base Rent and NOI

Both base rent and NOI per square foot have increased steadily each year since 2021. According to NCREIF/ICSC, base rent rose from $23.29 to $28.79 per square foot (PSF)—an approximate 24% increase over four years—while NOI grew from $24.69 to $32.76 PSF, marking a stronger gain of about 33% during the same period. The rollover of legacy leases into new agreements at higher market rates is driving this upward trend, enabling landlords to boost rental income and achieve significant NOI growth.

Figure 2.
US Malls: Base Rent and NOI (USD PSF)

Source: NCREIF/ICSC

 

Foot traffic

Foot traffic data from Placer.ai indicate that indoor malls were the top-performing shopping center format in the US in 2025. Indoor malls recorded positive foot traffic growth in every quarter, ending the year with a 1.3% year-over-year increase, compared to 0.6% growth for open-air shopping centers. This outperformance shows that indoor malls are not only maintaining relevance but also drawing in more visitors.

Indoor malls have also positioned themselves as experiential hubs, with average visit durations lasting 72.9 minutes in 2025, longer than at open-air shopping centers (66.6 minutes).

Figure 3.
US Indoor Malls and Open-Air Shopping Centers: Visits (YoY % Change) and Average Dwell Time (in Minutes) in 2025

Source: Placer.ai

 

2. The Bifurcation of the American Mall

Top Tier vs. Non-Top-Tier Malls: Occupancy Rates

Top-tier malls have demonstrated a resilient upward trend in occupancy, growing from 92.8% in 2021 to a peak of 95.8% in 2024, according to our analysis of a sample of operators. Occupancy was essentially flat at 95.5% in 2025, underscoring that these premium assets have maintained a high level of tenant demand over the five-year period. This indicates a strong market preference for high-quality retail spaces that can weather economic shifts.

Top-tier mall operator Simon Property Group has been reporting occupancy in the 96%–96.5% range across its portfolio in recent fiscal quarters, near historical highs for the company. Management attributed this strength to sustained leasing momentum, with strong demand from both existing tenants and new brands generating a high volume of deal activity, as well as healthy tenant sales and rising shopper traffic. The company also pointed to its disciplined investment approach, ongoing redevelopment and remerchandising of spaces —particularly former department store locations—into uses that better align with current consumer demand, collectively supporting consistently high occupancy levels..

Figure 4.
Average Occupancy Rate: Top Tier vs. Non-Top-Tier Mall Operators (%)

Data from a sample of four public mall operators—see Methodology section
Source: Company reports/Coresight Research

 

Top Tier vs. Non-Top-Tier Malls: Average Base Rents

Top-tier malls command significantly higher rents and continue to experience steady, predictable growth, which reinforces their status as structurally stronger assets. In contrast, non-top-tier malls lag considerably in rent levels and show a more uneven recovery trajectory. The disparity in both stability and pricing power between the two segments remains substantial.

Top-tier mall operators increased average rent PSF from $60 to $68 between 2022 and 2025. In comparison, our sample non-top-tier REIT saw only modest growth, rising from $30 to $31. The rent gap remains substantial, with top-tier malls generating more than twice the rent PSF.

Figure 5.
Top-Tier and Non-Top-Tier Mall Operators: Average Base Rent (Left Axis; USD per Sq. Ft.) and YoY Growth (Right Axis; %)

Data from a sample of four public mall operators—see Methodology section
Source: Company reports/Coresight Research

 

Top Tier vs. Non-Top-Tier Malls: Foot Traffic

Top-tier malls consistently outperformed their non-top-tier counterparts in traffic growth each year from 2022 to 2025. Top-tier malls maintained positive traffic growth every year, supported by their stronger tenant mixes, more desirable locations and higher consumer appeal. Foot traffic at non-top-tier malls, however, weakened steadily and turned negative in 2025. Our analysis is based on a sample of 40 malls, of which 20 are classed as top-tier and 20 as non-top-tier.

Figure 6.
Top-Tier and Non-Top-Tier Malls: YoY % Change in Number of Visits

Based on a sample of 20 top-tier malls and 20 non-top-tier malls—see Methodology section
Source: Placer.ai/Coresight Research

 

3. Demand Drivers Shaping the Mall Sector’s Future Outlook

Structural Undersupply of New Retail Space Will Benefit Mall Operators

Demand for retail space has consistently outstripped new supply in most markets across the US, creating a supply-demand imbalance that is increasing the value of existing assets. Retail construction starts and deliveries have slowed due to a combination of largely unrelated factors, including a constrained lending environment, limited land availability, stricter municipal zoning regulations and private market transaction pricing falling below replacement cost. Retailers that need to grow physically have a shrinking set of viable options.

• New shopping center space remained historically low in 2025 with just 10.2 million square feet coming online for the year—an all-time low and 63% below the 2015–2019 average, according to real estate service firm Cushman & Wakefield.
• Tariff cost pressures exacerbated an already subdued construction market, dampening the economic feasibility of new development and reinforcing the supply-constrained environment that has prevailed since the pandemic.
• The under-construction pipeline still represents just 0.3% of existing inventory as of 2025, down from the 0.6% long-term average, suggesting the inventory growth will remain sluggish for the next few years.

Retail Bankruptcies Will Unlock Retenanting and Portfolio Upgrade Opportunities

The department store sector is in transition.

• A declining trend was accelerated by the pandemic and has been reflected in selective bankruptcies and consolidation, including Saks Global’s Chapter 11 filing.
• However, as we recently discussed, a focus on retail execution is driving an improved performance at Macy’s and has supported Dillard’s medium-term outperformance versus midrange peers. At the same time, Bloomingdale’s has posted strong sales growth in the luxury segment.

Filling Department Store Space

For mall owners, the impact of closures varies by asset quality: at top-tier malls, losing a department store is typically advantageous —and with limited new supply coming to market, presents a genuine opportunity to backfill large-format anchor spaces with higher-quality tenants at more favorable rents, particularly where legacy leases were well below market rates. The top-tier owners are anticipating and proactively taking back units to redevelop. For lower-tier malls, however, losing a department store anchor can be far more damaging, as the demand and tenant mix needed to backfill that space may be limited.

While apparel remains a core component of the tenant mix, top-tier mall operators, such as Simon, are increasingly adding dining, entertainment, wellness, residential, EV showrooms, hotels and, in some cases, office or community spaces to create more diversified consumer destinations and revenue streams. These experience-focused destinations, shaped by mall owners to blend retail, food and entertainment, are building a stronger sense of community and drawing in younger shoppers who once had little reason to visit.

This strategic tenant curation and upgrading trend is well underway across the sector:

• Macerich, in its fourth-quarter earnings call, said that it had committed all 30 anchor and big-box replacements identified in its five-year Path-Forward plan, representing 2.9 million square feet expected to generate roughly $750 million in annual tenant sales. The company expects these replacements will drive traffic, extend dwell time and catalyze in-line leasing. It noted that DICK’S House of Sport is emerging as the standout anchor-replacement concept: its first opening at Freehold Raceway Mall, in the former Lord & Taylor space, drove an 18% share of mall traffic, and Macerich now has nine committed locations across its portfolio.

Diversity, Newness and National Appeal

One industry source advised Coresight Research that the key traits of a successful mall in 2026 are tenant diversity and newness. Proactive investment and redevelopment by landlords are at the heart of this transformation, creating desirable destinations that draw customers in, which in turn attracts brands looking to follow where shoppers are.

A successful mall must feature a variety of relevant brands that cater to a broad audience. It is crucial to have new and exciting brands that are poised for growth, and to ensure a balanced mix of popular names, especially those that can reach a wider demographic beyond just major cities such as New York, Miami and Los Angeles. Additionally, malls need to offer more than just retail spaces. To keep customers engaged for longer periods, there must be additional attractions, such as dining options, entertainment experiences, play areas, or other activities that cater to different types of shoppers. This approach ensures that the mall can appeal to both quick shoppers and those seeking a longer stay.

3) Luxury Brands Continue to Expand Physical Footprint

Luxury brands continue to expand their physical retail presence, providing a meaningful demand tailwind for premium mall operators such as Simon Property Group and Westfield. Despite broader macroeconomic uncertainty, high-end retailers have remained focused on store expansion, particularly in top-tier malls and flagship locations. This reflects the unique role of physical stores in the luxury segment—not just as points of sale, but as immersive brand environments that enable storytelling, personalized service and deeper customer engagement that cannot be replicated online.

In recent years, luxury brands, including Louis Vuitton, Gucci and Hermès, have accelerated store openings, renovations and relocations into larger, more prominent spaces within high-performing malls. These investments are often directed toward experiential flagship formats that integrate private clienteling areas, curated product displays and enhanced in-store services. As a result, luxury tenants tend to generate higher sales productivity and command premium rents, making them highly attractive for landlords.

Coresight Research data show:

• Luxury brands and retailers opened 318,000 square feet of retail space in the US in 2025, two-thirds more than the 192,000 square feet opened in 2024 (data are gross openings, for luxury-goods stores excluding department stores).
• About 39% of new luxury stores in 2025 were by brands and retailers that we characterize as predominantly on-mall retailers.
• A steady rhythm of about 60 luxury store openings per year in recent years (shown in Figure 7).

Looking ahead, we expect resilient spending from high-income consumers, combined with the enduring relevance of physical retail in luxury, to sustain this expansion. As a result, premium mall operators are well positioned to capture disproportionate demand, strengthen tenant mix and drive long-term rent growth.

Figure 7.
US Major Luxury Brands and Retailers: Total Store Openings

Openings are gross (i.e., do not account for closures); excludes luxury department stores
Source: Coresight Research

 

4) Gen Z Is Driving the Return to Malls

Gen Z’s strong preference for physical retail and social shopping experiences is playing a key role in the revival of malls, challenging earlier assumptions that this cohort would remain mostly digital. Coresight Research consumer surveys show that mall visitation is significantly higher among younger cohorts than older ones. Based on combined weekly surveys from December 2025, January 2026 and February 2026, 48% of shoppers aged 18–29 said they had visited a mall in the past two weeks, compared with 42% of those aged 30–44 and just 27% of those aged over 60.

Figure 8.
Proportion of US Consumers Who Have Gone to a Shopping Mall in the Two Weeks Prior to Each Survey, By Age (% of Respondents)

Base: US respondents aged 18+, surveyed weekly (about 400 each week)
Source: Coresight Research

 

Nostalgia and Digital Brands Support Mid-Tier Mall Appeal with Gen Z

The Gen Z influence is broadening the mall recovery story beyond luxury and trophy assets. While top-tier malls continue to lead in performance, this demographic is also reinforcing the relevance of healthy mid-tier properties, particularly those with the right mix of youth-oriented fashion tenants.

• This resurgence is partly rooted in a broader nostalgia cycle. Gen Z’s embrace of 1990s and early-2000s aesthetics is benefiting legacy youth retailers such as Abercrombie & Fitch, Hollister, Aeropostale, Garage and Charlotte Russe.
• At the same time, digitally native brands such as Edikted, emerging concepts such as Altar’d State and international brands including Olive Young, Princess Polly, Sukoshi and Subdued are bringing novelty and global appeal to the mall tenant mix.

From Social Media to Social Spaces

Gen Z has grown up with frictionless digital commerce as a baseline expectation, yet precisely because of this ubiquity, they increasingly seek the tangible, social and experiential dimensions of physical retail. Malls function as social infrastructure for Gen Z: places to meet, be seen, discover brands through peer interaction and engage with the multisensory environment of curated retail. The “mall as third place”—between home and school or work—has re-emerged as a culturally resonant concept for this demographic.

This stems in part from a generational experience of isolation, as many in this cohort grew up during the pandemic lockdown and experienced a more digitally mediated reality than prior generations.

The influence of social media, particularly TikTok and Instagram, has made the mall a content-creation destination, where aesthetically curated spaces serve as backdrops for organic and shareable moments. This dynamic rewards mall operators and tenants that invest in visually engaging environments with “Instagrammable” decor that encourages social sharing.

Looking ahead, as Gen Z’s spending power continues to grow, their influence will remain a key structural driver of malls’ long-term relevance.

What We Think

Longer term, our view on the mall sector is optimistic, supported by retailer omnichannel strategies and minimal new supply. Retailers have come to embrace the omnichannel approach as a healthy balance between brick-and-mortar locations and an online presence has proven to yield the best results. Shopping cart size, merchandise returns and even online sales typically improve when matched with a carefully curated retail footprint. Further, the tenant base has strengthened, as weaker operators have exited through bankruptcies and are being replaced by more productive concepts that drive higher sales and can support higher rents.

Implications for Brands/Retailers

• Physical stores in top-tier malls are marketing channels as much as sales channels. These locations act as high-visibility touchpoints where brands can shape perception, launch new products and engage high-intent consumers in ways that digital alone cannot replicate. Their influence often extends beyond immediate transactions, driving online traffic, improving conversion across channels and reinforcing brand premiumization. As a result, the true return on these stores lies in their ability to amplify the broader ecosystem, not just generate direct store sales.
• Strategic placement in premium malls serves as a powerful branding signal, with the halo effect of neighboring luxury and aspirational anchors validating a retailer’s market prestige. Retailers that secure space in top-tier malls—especially those being remerchandised—use the presence of neighboring tenants to build a sophisticated identity, which shapes how consumers see them in ways that lower-tier real estate simply cannot match.
• Physical retail has evolved into a medium for content and discovery. Stores that are not designed for engagement, storytelling and social sharing and are purely transactional risk becoming invisible, even in high-traffic malls.
• As mall operators aggressively upgrade their tenant mix to attract luxury and experiential brands, legacy tenants with below-market leases and declining productivity risk being squeezed out of top-tier assets.

Implications for Mall REITs

• Future NOI growth will be driven less by occupancy gains and more by lease rollover, as the spread between expiring legacy rents and current market rents remains wide across many properties. As a result, mall operators that are disciplined about replacing low-productivity tenants and actively curating their tenant mix are better positioned to capture this upside than those that prioritize headline occupancy.
• The transformation of malls into lifestyle destinations demands an evolved tenant mix that can support consumers’ full range of day-to-day needs. Malls that people genuinely want to visit—not just to shop, but to live, work and experience—will attract stronger tenant demand and deliver more resilient performance.
• Data-driven leasing (traffic analytics, sales productivity) will become critical to improve tenant curation and increase asset-level returns.
• Capital should be concentrated in top-tier assets, with a willingness to divest or repurpose underperforming properties that lack a credible path to reinvention. However, not all REITs have the access to capital to invest, so those with the financial capacity to revitalize and enhance their properties will be positioned to win.

Mall REITs Poised to Gain Advantage

• Simon Property Group—Best positioned given its unmatched scale and high concentration of premium assets in top markets across the US. Its exposure to top-tier malls and healthy balance sheet enables it to continuously invest in its properties, upgrade its tenant mix, and capture outsized demand from luxury and global brands. Simon’s portfolio contains a high percentage of the best malls in the country, resulting in desirable places to be for new and existing brands.
• Macerich—High exposure to top-tier coastal assets and an active redevelopment pipeline position it well to capture upside from retenanting and anchor transformation, though execution remains key.
• GGP (Brookfield Properties)—Well positioned through its strong portfolio of 101 retail properties in the US, which includes premier assets such as Tysons Galleria and Kenwood Towne Centre, and benefits from Brookfield’s deep redevelopment expertise and global tenant relationships.
• Unibail-Rodamco-Westfield—Despite prior balance-sheet pressures, Unibail-Rodamco-Westfield’s portfolio of flagship malls in global gateway cities (including high-quality US assets) positions it well to benefit from luxury demand, experiential retail and international tourism. Its ongoing portfolio rationalization and focus on core flagship destinations could drive strong performance as capital and tenants concentrate in best-in-class assets.

Mall REITs That Risk Losing Advantage

• Mall operators with significant exposure to non-top-tier markets face a compounding set of challenges. Weaker tenant demand, limited retenanting options for luxury and experiential assets, greater exposure to tariff-pressured midmarket retailers and constrained access to capital for redevelopment create a self-reinforcing cycle. Without the portfolio quality or financial flexibility to invest in the upgrades that drive traffic, these operators risk falling further behind as the sector bifurcates.

Notes and Methodology

Data and conclusions in this report are as of April 2, 2026.

For the comparison of occupancy rates and average base rents between top-tier and non-top-tier malls (Figures 4 and 5), we analyzed data from four publicly listed mall REITs. Three of these are classified as top-tier operators and one is non-top-tier. The small sample for non-top-tier REITs is due to a paucity of publicly listed lower-tier mall REITs. Some of the REITs own multiple property formats, including open-air and outlet centers, in addition to traditional enclosed malls.

The mall traffic comparison between top-tier and non-top-tier assets (Figure 6) is based on a sample of 40 malls sourced from Placer.ai, with 20 classified as top-tier and 20 as non-top-tier by Coresight Research.

This report considers “malls” to include only traditional, enclosed shopping malls, and not alternative center types such as strip malls.

Top-tier malls: This is a subset of malls featuring luxury retailers and newer direct-to-consumer (DTC) brands; often located in more affluent areas where a typical shopper has an annual income of over $200,000 (based on census block median household income of mobile phone location data for a plurality of mall visitors, as of our 2023 analysis)

Non-top-tier malls: This segment is diverse and does not only encompass “lower-tier” or underperforming malls. Non-top-tier includes mid-tier malls that have anchor retailers and few or no vacancies and that are located in moderately affluent neighborhoods where a typical shopper has an annual income of around $100,000 (as of our 2023 analysis). However, this segment also includes low-tier malls that have an empty anchor, declining sales and a less-affluent customer demographic.

Companies mentioned in this report are: DICK’S Sporting Goods (NYSE: DKS), GGP (Brookfield Corporation; NYSE: BN), Macerich (NYSE: MAC), Saks Global, Simon Property Group (NYSE: SPG), Unibail-Rodamco-Westfield (EPA: URW).

Selected Sources and Further Reading

News Media 

• Retail Dive
• Financial Times
• WWD
• ICSC

Further Third-Party Publications and Events 

• December 2025 Mall Index: Recapping 2025 Shopping Center Trends (Placer.ai, January 2026)
• Marketbeat United States Retail Q4 2025 (Cushman & Wakefield, January 2026)

Trade Sources

• Trade interviews