THEMALLIS DEADWho Killed It, Why
It’s Not Coming Back and What’s Next for Retail

Lookslikesomethingfrom
TheWalkingDead,right?

Themaindifference
betweenthismalland
TheWalkingDead...

The mall isn’t coming
back to life.

Let’s see what we learn
from examining the body.

Let’s see what we learn
from examining the body.

First, we’ll check the
vital signs, just to be sure the mall is really dead.

400+ MALLS Source: Yahoo! Finance
were repurposed or closed outright in last decade

Source: Yahoo! Finance No new
enclosed malls have opened since 2006

Green Street Advisors, June 2012
10%of the 1,000 malls in the U.S. will FAILin next 10 years

ARE MALLS OVER? AMERICA’S ABANDONED
MALLS ARE PLACES OF NIGHTMARES -BEAUTIFUL DECAY NORTHTOWNE SQUARE MALL FIRST TOLEDO MALL TO JOIN “DEAD MALLS OF AMERICA” -EXAMINER.COM

Yep, things are NOTLOOKINGGOOD for
shopping malls.

(But it wasn’t always this
way...) Yep, things are NOTLOOKINGGOOD for shopping malls.

Sales / occupancy rates at
malls are stagnant; only fortress malls continue to thrive 2009 More than 60 new malls larger than 400,000 square feet open in U.S. 80s–90s First enclosed regional mall, Southdale Center, opens in Edina, MN 1956 First megamall opens in Alberta, Canada with over 800 stores 1981 Mall of America opens with more than 35 million visitors in the first year 1992

FORTRESSMALLS are still succeeding due
to population growth, a desirable tenant mix, sophistication of nearby residents, and high-end amenities offered. Some

In 2012, these two fortress
malls surpassed $1 billion in sales! South Coast Plaza Costa Mesa, CA 2.8 million sq. ft. Northpark Center Dallas, TX 2 million sq. ft.

So, who is to blame
for killing the traditional shopping mall?

GEN Y

Approximately
80MILLION18-to35-year-oldsliving
intheUnitedStates

That’s more than 25%of U.S.
population

In 2013, millennials spent about
$600 BILLION

In 2013, millennials spent about
By 2020, millennial retail spending could hit $1.4 TRILLION $600 BILLION

What was Gen Y’s
MOTIVE?

Malls weren’t meeting their
LISTOFDEMANDS

Walkability

UrbanFeelWalkability

UrbanFeel
Local
Restaurants
Walkability

Unique
Experiences
UrbanFeelWalkability
Local
Restaurants

Source: ArchPoint Consulting of millennials
say customer service is very important 48%

of millennials demand an
integrated, seamless shopping experience, regardless of channel.68% Source: Accenture

Online shopping offers a wider
selection, better prices and access to more information.

Naturally, malls are struggling
to keep up.

Amazon’s five-year average ROI
is 17%whereas traditional retailers average 6.5%

During the 2013 holiday shopping
season, U.S. retailers received roughly HALFof the holiday foot traffic they experienced three years prior.

In 2014, it is forecasted
that online sales will account for 9%of total U.S. retail sales.

This will likely increase to
11%of total U.S. retail sales by 2018.

Source: ArchPoint Consulting 80%of millennials
want brands to entertain and delight them during their shopping experience

Don’t write off these new,
higher expectations as MILLENNIALS BEING MILLENNIALS*

* Millennials are stereotypically assumed
to be spoiled, demanding, etc. MILLENNIALS BEING MILLENNIALS* Don’t write off these new, higher expectations as

This evolution within the retail
industry extends beyond adults ages 18 to 35. There is a NEWCLASSOF CONSUMERS

They expect a new
kind of shopping experience that has… Walkability Experiences Connectivity

and they are going to
get it.

The new-class consumer provides
instant feedback. She posts pictures of what she likes on Instagram and complains on Twitter about bad customer service. She spends money in places where she enjoys being. The smart retailers are taking this feedback and evolving their visions and merchandising strategies. ! Liz Gillespie VP Marketing North American Properties

Top retailers
GETIT

We've had a real
estate strategy of not bundling or taking weaker malls, and we go to [lifestyle] centers… which allow us to really drive our business through community. Christine M. Day Lululemon Athletica Former President and CEO

We rarely do malls. Our
preference is to be on the street. In a suburban market, we want to be in a village atmosphere that has pedestrian as well as vehicular traffic. ! Wade McDevitt Representative for Anthropologie

And they aren’t alone.
Countless restaurants and retailers are choosing this…

Alpharetta, GA

Instead of this…

Image of
rundown mall

Some brands are leaving
their current Alpharetta locations and relocating to Avalon.

Others are completely new
to the market and chose Avalon for their first location. L O U G R E Y

And they aren’t alone.
Research shows that top brands and up-and-comers, alike, are moving AWAYFROMMALLS

2 STORES OPENED THIS YEAR
4 MORE OPENING The Woodlands in The Woodlands, Texas (Lifestyle Center / March 2014) Shops Around Lenox in Atlanta, Georgia (Open-Air Center / May 2014) University Park Village in Fort Worth, Texas (Lifestyle Center / Summer 2014) The Summit in Birmingham, Alabama (Lifestyle Center / Fall 2014) Avalon in Alpharetta, Georgia (Mixed-Use / Fall 2014) Classen Curve in Oklahoma City, Oklahoma (Mixed-Use / Fall 2014)

3 STORES ANNOUNCED TO
OPEN THIS YEAR Belvedere Street in Tiburon, California (Standalone / June 2014) North Hills in Raleigh, North Carolina (Lifestyle Center / June 2014) Avalon in Alpharetta, Georgia (Mixed-Use / Fall 2014) Planning to open another 5-10 before the year’s end; haven’t announced where or when

78 FREESTANDING STORES The McLaughlins
seek buildings with character on street locations, occasionally open in lifestyle centers, and shun malls. “Frankly, the mall atmosphere diminishes the brand.” – Kevin McLaughlin

Top developers and operators
GETIT

THE GROVE’S AWARD-WINNING CONCIERGE
SERVICES Personal shopping Dining reservations Package check Store, area and tourism information Foreign language assistance Events and activity assistance The Grove Gift Cards by American Express

ONE OF THE BIGGEST TOURIST
ATTRACTIONS IN CALIFORNIA WITH 18+ MILLION VISITORS PER YEAR THAT’S MORE THAN DISNEYLAND!

THE AMERICANA AT BRAND’S
CONCIERGE SERVICES Bellman service, package assistance, package check Restaurant and travel reservations Assistance with concert/event tickets Postage, mail, shipping and delivery assistance Gift giving and shopping assistance Gift cards by American Express

THE AMERICANA AT BRAND
HAS 16+ MILLION VISITORS PER YEAR GENERATES ANNUAL SALES OF $1,100 PER SQUARE FOOT OUT OF ITS 70 STORES

And…

The Southeast’s preeminent experiential
development – a place where resort-inspired hospitality, specialty retail, entertainment, restaurants, residences, offices, hotels and public spaces come together to create a truly unique experience.

60+leases signed with Avalon in
the past year

97%leased when Avalon was still
6 months away from grand opening

Consumers are
ENGAGED

Their feedback is not only
plentiful, but positive as well.

RETWEETS 624 MENTIONS 3,375 REACH
17.8M

PAGEIMPRESSIONS 1.2M POSTIMPRESSIONS 678K ENGAGEMENT
40K

MEDIABUZZ

$600M MIXED-USE DEVELOPMENT IN ATLANTA
SUBURB GETS GREEN LIGHT —COMMERCIAL PROPERTY EXECUTIVE ALPHARETTA’S AVALON PROJECT SNAGS 1ST TENANT —ATLANTA BUSINESS CHRONICLE One of Atlanta’s Hottest Restaurant Groups Signs at Avalon — North American Properties “ALPHARETTA’S AVALON IS DRAWING IN-TOWN RESTAURANT, RETAILERS” —11ALIVE “ALPHARETTA LIVE-WORK-PLAY DEVELOPMENT TAKES NEXT STEP” —WSB–TV “AVALON GROWTH APPROACHING TO BOOST ALPHARETTA” —GEORGIA NEWS

The mall may be dead…

but retail is alive and
well.

Experience it at

Opening October 2014

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Shutterstock / 35694751 AMC, The
Walking Dead (Fair Use Doctrine) Shutterstock / 148370285 Wikimedia Commons Wikimedia Commons Flickr / “South Coast Plaza, Costa Mesa, 1980s" by Orange County Archives Flickr / "(Formerly) My Drive Home" by SteevzStuff Flickr / "Northpark Center" by Terrance Gilbert Shutterstock / 160438778 Atlantic Station / North American Properties Flickr / “The Grove in Los Angeles” by Eric E. Johnson Angie Mosier Shutterstock / 3666347 Atlantic Station / North American Properties Shutterstock / 119152066 Lululemon / Media Assets Flickr / “Anthropologie" by Dave Pinter Wikimedia Commons Kendra Scott Blog Flickr / “Vineyard Vines Hingham in-Store" by Jeff Cutler Flickr / "The Grove (Los Angeles)" by Prayitno Photography Flickr / "LA Farmers Market" by Prayitno Photography Flickr / "The Americana at Brand" by Chris Yarzab Shutterstock / 94124290 CREDITSSlide 2, 3, 4 Slide 5, 6 Slide 8 Slide 10 Slide 11 Slide 16 Slide 19 Slide 22, 23 Slide 26-29 Slide 30, 31 Slide 36 Slide 38 Slide 40 Slide 41 Slide 45 Slide 48 Slide 49 Slide 52, 53 Slide 54, 55 Slide 65