The Reshaping of Retail

In a dynamic response to the ever-evolving retail landscape, Westfield Old Orchard, the upscale shopping mall located in north suburban Skokie, is undergoing a monumental $100 million revamp – the most significant in its 67-year history. GDL Capital, always keeping a pulse on retail real estate trends, finds the strategies behind such transformations enlightening and indicative of where the future of retail is headed.

Central to Westfield's transformative vision is the adaptive reuse of the Lord & Taylor building. This large, vacant space will soon house a diverse array of smaller retailers like the home furnishings brand Arhaus, mini-golf destination Puttshack, and the chic clothing store Zara. As Serge Khalimsky, Westfield Old Orchard's senior general manager aptly stated, such a shift will not only revitalize this empty space but will also boost overall foot traffic, benefiting existing retailers.

This move signals a broader shift in the retail world – a departure from traditional big-box retailers, which have increasingly struggled in suburban settings, towards a more mixed-use approach. Westfield's plan envisions the mall as more than just a shopping hub; it's to be a 24/7 community replete with homes, a town square, outdoor amenities, and tantalizing new eateries. This concept of a "mini city within a city" is reflective of a broader industry trend where developers are aiming to infuse malls with a 24-hour vitality, incorporating evening activities to counteract the digital shopping shift.

Additionally, the trend of shrinking larger stores while expanding specialty or luxury brands is evident. Case in point: Bloomingdale’s transitioned from its expansive 200,000-square-foot store to the more intimate "Bloomie’s," occupying just a quarter of the original space.

It's not just Westfield leading the charge. The Niles Village Board's recent approval of a $440 million overhaul of Golf Mill Shopping Center points to a pervasive industry evolution. Here, the developer aims to reimagine the mall entirely, adding retail space and a new 300-unit luxury apartment complex. This reshaping is largely driven by the need to adapt to the changing tides of consumer habits.

Skokie Mayor George Van Dusen rightly acknowledges the significance of Westfield's redevelopment, lauding it as a strategic move that will ensure Skokie remains the North Shore's top destination for shopping, dining, and entertainment.

At GDL Capital, we believe such transformations emphasize the importance of innovation and adaptability in the world of commercial real estate. 

*Read more in the article by Brian J. Rogal in the Chicago Tribune published on October 10, 2023: https://www.chicagotribune.com/business/ct-biz-old-orchard-lord-taylor-20231010-fiwcqtept5gd3euy5bbxdtzzzm-story.html