The Future of the American Shopping Mall Is Shaped in Los Angeles

By Benjamin Raziel

LOS ANGELES — Over the past two decades, the rise of e-commerce, changing consumer behavior and a lack of strategic repositioning have led to the steady decline of America’s shopping malls. Declining profits from brick-and-mortar retail, exacerbated by the COVID-19 pandemic, have led to a wave of cuts and job losses across the country, questioning the future of America’s malls.

But Tyler Mateen, founder and CEO of Cannon TTM, believes the mall is not dead and can be revived with the right strategy and investment. With a change of direction, malls can still lure crowds of shoppers back to brick-and-mortar shopping — and that change has already begun at Los Angeles’ HHLA mall.

“The current version of the American mall is failing, but it doesn’t have to be,” Mateen said. “Just as the Sherman Oaks Galleria underwent a significant transformation in the early 21st century, changing the concept of the mall from a traditional, enclosed space to an open-air lifestyle center with integrated office space, restaurants, a gym and a multiplex cinema, today’s malls can evolve to focus on changing the image and function of the mall through revolutionary shopping, entertainment and culinary experiences. There is still much opportunity for the American mall to once again become a comprehensive community center.”

Tyler Mateen’s company bought the HHLA mall, formerly The Promenade at the Howard Hughes Center, for about $80 million in 2023 and has already attracted tenants that Mateen said will help transform the mall into an entertainment and lifestyle destination in Los Angeles.

According to Mateen, the old model that malls have relied on since their inception is no longer viable. A recent IBIS World study found that mall revenues have declined by 4% over the past five years. While consumers have been slowly returning to brick-and-mortar stores since the pandemic, shoppers need new reasons to return.

Changing consumer preferences led Tyler Mateen to hire Meow Wolf, an immersive art company with installations across the country, as a tenant this year. Meow Wolf plans to open a permanent exhibit at the mall in a little over a year, taking over part of the Cinemark space in the building.

“I’ve always wanted to bring immersive, innovative experiences to the mall,” Mateen said. “Meow Wolf and other entertainment offerings will be a hallmark of the next phase of HHLA.”

These immersive entertainment experiences are quickly becoming a focal point of the shopping mall’s appeal to consumers. HHLA also recently welcomed 60out Escape Rooms as a tenant, with the mall becoming the company’s flagship location for escape rooms and virtual reality entertainment.

Malls across the United States are following HHLA’s lead by incorporating more immersive, interactive, and entertaining tenants. By incorporating arcades, movie theaters, laser tag, go-karts, indoor sports, and even roller coasters, malls are attracting a whole new audience of thrill-seeking consumers.

Macerich, a Santa Monica-based real estate developer, recently announced plans for a $100 million redevelopment of its Green Acres Mall, including the addition of new experience-oriented tenants Launch Family Entertainment and Chuck E. Cheese.

“We want to introduce more entertainment and more experiential applications,” Eric Bunyan, senior vice president of leasing at Macerich, said in a recent Newsday article.

This shift toward in-person experiences is appealing to consumers who crave the immediacy that has made online shopping so popular, particularly Gen Z consumers. According to the International Council of Shopping Centers, younger consumers now prefer in-person shopping as much as online shopping, if not more. Gen Z, which makes up 40% of global consumers, is increasingly interested in the instant gratification of trying and buying products in person. Malls across the country are hoping to bridge that gap with entertainment, offering tangible, immediate experiences that can’t be replicated at home.

By expanding entertainment offerings, malls can return to being a centralized hub for shopping, dining and entertainment for consumers. Simon Property Group, a real estate investment trust based in Indianapolis, announced that its Keystone Fashion Mall will undergo a major renovation by the end of 2026, including a new dining and entertainment complex and office space.

“We have this kind of concept of live, work, eat, play, shop, you know, it’s this one-stop experience for the individual,” John Rulli, chief administrative officer of Simon Property Group, said in a recent Fox 59 article.

These changes have already yielded positive results. A study by Coresight Research found that customer traffic in shopping malls increased by more than 10% on average compared to pre-pandemic levels.

“The death of the mall has been greatly exaggerated,” Deborah Weinswig, founder and CEO of Coresight Research, told USA TODAY. “The flip side of that is that opportunity is much more important.”

Experience-oriented renovations like HHLA’s draw in customers by reminding them why the mall was a cultural institution in the first place. The convenience, variety and immediacy of the mall have always had obvious staying power, but Mateen believes customers simply need to be reminded of its benefits from a new perspective.

“There is no doubt that immersive technologies will redefine the future of entertainment and retail,” said Tyler Mateen. “These innovations, while still in their infancy, are advancing at an unprecedented pace, captivating audiences and consumers alike. The Sphere in Las Vegas is a remarkable example of the transformative power and appeal of immersive experiences. As they are refined and made more accessible to consumers, these experiences will become even more compelling, enabling malls to once again become essential destinations for entertainment and retail.”