Southern California Mall Owners Rise to Meet Physical Retail’s Evolution

When it comes to retail trends, what’s old often becomes what’s new. Retail property trends follow the same logic.

In 2025, retail assets have stood out as some of the strongest growth opportunities in all of commercial real estate. Solid fundamentals met relatively affordable properties and pent-up capital in the wake of the pandemic, creating something of an investment boom — a far cry from the days when American malls were declared dead. That being said, the public’s relationship with brick-and-mortar storefronts has evolved since the “retail apocalypse,” and continues to evolve by the day.

Southern California investors and developers have taken notice. A flurry of large, traditional shopping hubs  — such as Lakewood Center in Lakewood, The Oaks in Thousand Oaks and Long Beach Towne Center — has traded hands in the region over the past year for nine figures,. These malls sometimes traded for far less than their previously appraised values;  Lakewood Center sold for $332.1 million in August, compared with a $630 million appraisal 10 years ago. But the actual price paid for these properties comes down to simple supply and demand. The inherent value of traditional malls has tumbled over the past decade (if it wasn’t overly inflated to begin with). But retail’s stock is rising, as are large, available parcel assemblages in Southern California, and there’s no new supply coming online anytime soon.  

“Southern California, even though it’s broadly suburban, is way more dense than suburban communities throughout most of the country . . . so you have this dense suburbia with a lot of large parcels that haven’t been unlocked for a very long time,” Cole Perry, associate director of research for real estate analytics firm Altus Group, told Commercial Observer. “The minute one comes up . . . it’s why they trade for nine figures, because you go to another city in the Midwest where density is probably half of what it is in Orange County, and, even if you were to convert a large property [in the Midwest] into a different use, it just doesn’t have the same kind of draw that one in Southern California would.”

Consumer trends are nevertheless compelling many new owners to provide the public with fresh, elegant and comfortable experiences people can’t get anywhere else. 

Many consumers are rarely willing to drive to their local malls simply to buy an item and leave. Why should they? The internet has made the world available for purchase from their bedrooms. Despite the recent retail boom, visits to indoor malls in the first half of 2025 are 4 percent below the same period in 2019, according to Placer.ai data. 

Still, the performance of certain high-quality retail assets, such as Caruso’s The Grove and The Americana at Brand, demonstrates (particularly after COVID-imposed isolation) that the public wants and needs social spaces to gather in person. Those spaces just need to be worth their while. 

“There was a period, particularly in the early 2000s, when a lot of malls were carbon copies of one another; they all had the same chain stores,” Perry said. “But nobody really develops with this ‘Field of Dreams’ build-it-and-they-will-come principle anymore.”

Envisioning retail space as a communal watering hole isn’t a new concept. After fleeing Europe on the eve of World War II, Victor Gruen, the Austrian-American architect credited with creating the modern shopping mall, grew disquieted by the lack of social spaces in American cities and suburbia akin to the Viennese cafe districts of his youth. 

Gruen longed for a place that could “fill the vacuum created by the absence of social, cultural and civic crystallization points in our vast suburban areas,” according to biographer M. Jeffrey Hardwick, and the architect instead imagined a shopping plaza that could combine “a community center, an auditorium, a children’s play area, a large number of public eating places and, in the courts and malls, opportunities for relaxation, exhibits and public events.”

Gruen’s ideals were realized for a time, such as at his 1956-built Southdale Center in Edina, Minn. Yet, by the 1970s and ‘80s, malls were an entirely different beast — monolithic, climate-controlled mazes designed for shoppers to flit between storefronts as efficiently as possible. They symbolized American affluence and the stomping grounds of countless teenagers, immortalized in films such as “Fast Times at Ridgemont High” and “Clueless.”

But high schoolers don’t flock to malls in the way they once did. Families don’t spend the day at a mall just because they want to. A mall is no longer a metaphor for abundance, either. Too often, the mall is just a beige, gum-stained facility within which to exchange a gift at Express or Spencer’s. 

That’s the old model, anyway. To thrive, many mall owners are realizing that they must look even further back to the model that Gruen had originally imagined, even if they don’t know it. What’s old becomes new. 

Take, for instance, Lakewood Center. The roughly 2 million-square-foot, 1950-built goliath is one of the best-performing malls in California, recently ranking third in the state for annual foot traffic. The mall was 89 percent occupied at the time of August’s $332.1 million purchase by Pacific Retail Capital Partners (PRCP), Lyon Living and Silverpeak. 

PRCP plans to redevelop the property into a mixed-use community hub à la The Grove, while maintaining its retail anchor status. That includes new green spaces, a to-be-determined number of housing units, an overhauled leasing strategy and other capital improvements to create a cohesive, integrated destination. Building residences adjacent to retail hubs also allows owners to collect multifamily rent, while naturally infusing those hubs with more foot traffic and attracting fresh commercial tenants. 

“The Grove is a good example of the type of stuff that we’d like to attract at Lakewood,” said Oscar Parra, chief financial officer at PRCP. “We’re exploring all of that, and what we’re finding is people who live in Lakewood would love to have dinner at a restaurant like [the ones at The Grove]. Something that kind of hits that nerve with the local consumer is that they’re driving 10, 20 miles to go have that experience. We can provide it here, and it’s so dense here that it could support that use. We just need to densify it a little bit more, put those residences on-site, and then we can kind of move the [tenant-quality] needle.”

PRCP is far from the only developer attempting to inject life back into lifestyle centers. 

CenterCal Properties and DRA Advisors, for example, have similar plans for Long Beach Towne Center. The joint venture acquired the 870,000-square-foot mall for nearly $150 million in early October, aiming to revamp the aging property with new outdoor gathering spaces, landscaping, lighting and public art. Long Beach Towne Center had not traded hands since its construction in the late 1990s. 

The mall’s tenant roster and guest experiences are getting makeovers as well, as the development team plans to focus restaurant leasing efforts on chef-driven dining options, alongside new boutique fitness and wellness spaces and “family-oriented experiences.” A representative for DRA Advisors was not available for further information or comment. 

Another example is Stockdale Capital Partners’ $157 million purchase last November of The Oaks, a roughly 1.3 million-square-foot mall in southern Ventura County that traded for only slightly more than its roughly $150 million purchase price by Macerich in 2002. Although the 47-year-old property was extensively renovated in 2008 — adding an outdoor shopping component that spans tens of thousands of square feet and includes big-box retailers like Nordstrom — Jackson Hsieh, Macerich’s CEO, told investors at the time that the property needed to be “re-engineered,” particularly its retail component.

“All of these properties go through different life cycles, and for The Oaks it’s just the right time for that next phase of repositioning to bring in relevant brands and have a relevant offering for the community,” said Bastian Peters, managing director of retail asset management at Stockdale Capital Partners. “And also create an environment that speaks to the community, where they feel safe, where they would like to spend time, and is a lot more family-friendly. For me, that’s key to remaining relevant to the consumer. If you’re not relevant to the consumer, then there’s not necessarily a successful future ahead.”

Still, other malls, particularly luxury properties in wealthier urban areas, that have recently traded hands in Southern California are less likely to receive the makeover treatment in the near term. Not another one, at least. 

In early November, Indianapolis-based mall giant Simon Property Group acquired the remaining minority stake in owner Taubman Realty Group for an estimated $900 million, rounding out its $3.4 billion majority acquisition in late 2020 (following a re-negotiation from an earlier $3.6 billion offer). As part of the deal, Simon gained full control of Taubman’s 20-property portfolio, including Beverly Center, the eight-story, 883,000-square-foot luxury plaza on the edge of Beverly Hills and West Hollywood. 

Beverly Center is not the largest mall in the region, nor is it generally considered a top sales performer. What it does have, however, is clout. The 1982-built mall has long been a shopping destination for the rich and famous on L.A.’s Westside, with its prominent spot along La Cienega Boulevard featured in films, TV shows and music videos over the past four decades.

The mall’s $500 million renovation in 2018 — which added a new metal mesh façade, a 25,000-square-foot skylight, a redesigned central court, new rooftop terraces and dozens of new luxury retail tenants — doesn’t hurt either. 

“These trends are where you see the shopping center industry transforming,” Stockdale’s Peters said. “It’s not only us, but all the larger players as well. You really need to create a sense of community and provide an offering which speaks to the community. All of a sudden you have new uses: health and wellness uses, medical uses, alongside shopping centers. And that is really more like creating an integrated community.”

Nick Trombola can be reached at ntrombola@commercialobserver.com.