by Ioanna Magiati, Architect Partner | AO

For much of the past decade, the commercial real estate industry has talked about what aging malls and underperforming retail properties could become. Today, many of those ideas are moving from master plans and renderings into entitlements and construction. That shift marks a new phase for retail repositioning. The forces behind it are familiar: changing shopping habits, the decline of traditional department stores, rising demand for housing and a growing need for places that offer more than a single use. What has changed is the industry’s understanding of how these projects work in practice. JLL’s “Retail Market Dynamics Q1 2026” reported that 2.6 million square feet of retail space was demolished in the first quarter of 2026, primarily consisting of obsolete department stores and underperforming centers, even as overall retail vacancy remained relatively tight at 4.4%.