Tucson malls face big changes

Phoenix-based Newmark, a real estate advisor to large investors, has been retained to market the 1.1 million-square-foot Park Place mall at 5870 E. Broadway, its marketing brochure shows.

The mall’s large tenants include Dillard’s, Century Theaters, Total Wine and Old Navy.

The sale includes tenants on the periphery of the property: Applebee’s, Red Lobster, Cold Stone Creamery and Yogi’s Grill.

Park Place was sold in a foreclosure auction in 2023 for $87 million by its then-owner Brookfield Corp., which also owned Tucson Mall at the time.

Major changes likely

Buyers of either mall are unlikely to keep it as a traditional enclosed mall, industry analysts say. 

Park Place generates revenue of over $170 million a year, Newmark marketing material says.

But retail data analyst Shopping Center Business reports that Park Place Mall is $152,738,076 delinquent and Tucson Mall is $174,880,119 delinquent on their loans.

The 218,829 square-foot Sears building next to Park Place was bought by Phoenix investors for redevelopment in 2022.

That property is owned separately and opened in 1965, 10 years before Park Place opened. 

Evergreen Development remodeled the space for climate-controlled storage for Public Storage, and Cold Beers & Cheeseburgers will open soon on the ground floor, facing Broadway, with a 3,000-square-foot patio.

Plans for a residential complex on the southern parking lot are also being explored.

Paris Baguette, an international bakery known for artisan breads, pastries and cakes, recently announced it will open next to the new Cold Beers & Cheeseburgers.

It will be the second Tucson location for Paris Baguette, which has leased space next to the newly built Shake Shack at 3105 N. Campbell Ave.

The three-story Macy’s department store at Park Place closed in 2020 and has since been bought by local developer Bourn Cos.

Bourn has bought several retail and office complexes for redevelopment in recent years as well as vacant land for new projects.

In response to an inquiry submitted to the city’s zoning commission by Bourn, the commission replied that both commercial and residential development would be allowed on the property, city records show.

Bourn has been buying property in recent years for redevelopment into mixed-use projects that include residential, hotel, medical, restaurant, retail and entertainment.

In 2016, Bourn bought the former Foothills Mall on Ina Road and La Cholla Boulevard and leveled for construction of Uptown, which includes the recently opened apartment complex, Astrie, and a Tempo hotel that is under construction.

Bourn Cos. did not respond to a request for comment.

Residential, office combinations

Last year, New York-based Brookfield placed Tucson Mall, 4500 N. Oracle Road, up for sale, but no buyer has emerged.

As with Park Place, the Sears property near Tucson Mall is owned separately.

Nancy McClure, a local retail specialist, was part of the “de-malling” team at El Con on East Broadway — the city’s first enclosed mall — where the interior mall was demolished and replaced with standalone retailers such as Walmart, Target, Marshalls, Burlington and Ross Dress for Less.

“It took 10 years to take it from what it was to what it is today, and it has maintained occupancy since then,” said McClure, senior vice president and market leader with Western Retail Advisors.

She said malls that are being redesigned into destinations for living, working and dining are the way forward, and she sees that potential for Park Place.

“Park Place has prime positioning in a highly desirable retail hub that is supported by established nearby neighborhoods, corporate offices, hospitals (and) close proximity to the Davis-Monthan Air Force Base,” McClure said.

Residential and office combinations add steady traffic to retailers during the day and evening hours, she said.

“For a while there was so much hype that online shopping would be the end of in-store shopping, but over time, retailers have found that people want the in-person experience,” McClure said, noting that many shoppers browse online but want to see the item in person before buying. “It is a dynamic consumer experience, and retailers are adapting to what their customers are looking for.”

According to Capital One Shopping Research, there are only about 1,200 enclosed malls left across the country, a number which is expected to drop to less than 900 by 2028.

No large indoor mall has been built in the U.S. since 2019.