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Outlets hope to lure ‘destination shoppers’ back to Center City p2

6/4/2015 | Real Estate Blog

Few shoppers may realize it, but there are nine different categories of shopping centers, according to the International Council of Shopping Centers. There are super-regional malls, regional malls, lifestyle centers, neighborhood centers, power centers — the list is confusing until you look at the size of each category’s trade area. Neighborhood centers, for example, serve customers within a 3 mile radius; a regional mall’s trade area is 5 to 15 miles.

An outlet mall, the ICSC says, has a trade area of 25 to 75 miles. As we said in our May 22 post, these malls are designed for destination shoppers.

Generally, an outlet mall covers between 10 and 50 acres, many of which are dedicated to parking lots. There are no anchor stores, and there is no typical number of tenants. (A regional mall has between 40 and 80 tenants organized around two or more anchor stores.)

Other characteristics that differentiate outlets from regional malls: Outlets are not enclosed, though they do feature places for shoppers to sit down for a few minutes between stores. Outlets will have food courts and coffee shops, but seldom will you see a sit-down or even fast casual restaurant attached.

Regional malls may have restaurants accessible from inside the mall, including restaurants located in the anchor department stores. There’s another major difference: Outlets do not have anchor stores; there are no Macy’s or JC Penney department store at either end of the mall.

Developers and retailers are increasingly attracted to the outlet model. Simon Property Group reports that it has opened at least one or two outlet malls around the country every year for the past 20 years. The company’s overall occupancy for these outlet malls was an impressive 96 percent during the first quarter of 2015. Further, sales per square foot were up about 8 percent from the same period last year.

The Pennsylvania Real Estate Investment Trust is banking on the same kind of success in a completely different setting. By transforming the Gallery at Market East into the Fashion Outlets of Philadelphia, the developer is counting on shoppers wanting that second- or third-ring suburb feeling in an unapologetically urban location.

It’s a risk, but, if successful, the project could spur a new phase in retail for shoppers, developers and, of course, merchants.

Source:, “Finding a retail inlet with outlet markets,” Suzette Parmley, May 21, 2015