Declining tenant diversity in retail malls, 1970-2000

Abstract

A study of tenant diversity in retail malls was carried out to determine if tenant diversity declined between 1970 and 2000. The study measured tenant diversity by examining the percent of tenants that occur more than once in a given set of sample malls where each occupant of a single mall space counts as a single tenant. The study examined three sets of malls: a five-mall set of malls located in Massachusetts, a five-mall set of nationally distributed malls owned by different/separate owners, and a five-mall set of malls owned by the largest owner of retail malls, Simon Property Group. The study first examined tenant similarity within each of the five-mall sets in 1970 and then examined the degree of tenant similarity in the exact same sets of malls in 2000. A metric created for the purpose of this study and described as the "Commonality Factor" was used to determine the degree of tenant diversity in each set of malls at each of the two time periods. The conclusion reached in each set of sample data is that tenant diversity declined between 1970 and 2000. The study also examines the reasons for the decline in tenant diversity and the motivations of mall landlords to increase tenant diversity in order to conclude that though there are many explanations for the decline in tenant diversity, there is value for mall landlords in having tenant lists that are to some degree unique.