by Matthew Groves
If you have been to the Nittany Mall recently, you may have noticed a fair amount of empty space.
According to the store directory at the mall’s website, there are 24 leasing opportunities (store space that is unoccupied at the moment) and 86 possible store spaces. That suggests the mall is at 72 percent capacity, a storefront vacancy rate of 27 percent.
As the economic recession has persisted during the past two years, businesses have had to reduce spending and cut costs. So are these vacancies a result of the poor economy? Is there a concerning trend of more empty space at the 532,076-square-foot shopping complex on East College Avenue?
Lou Kanzleiter, general manager of the Nittany Mall, said that occupancy has remained practically unchanged during the economic recession.
Since 2008, the mall has lost its bank and a clothing store named B Moss, which filed for bankruptcy and closed all its stores nationally, while Strawberry’s, Aerie, Rue 21, Kitchen Collections have been added. Another change was the expansion of the Shoe Department into a 12,500-square-foot store.
“During the initial economic downturn in late 2008 and through 2009, national retailers were not opening new stores primarily due to the credit crunch,” Kanzleiter said. “This was something that was consistent throughout the entire United States. Including our department stores, Nittany Mall is currently 94 percent occupied as compared to 95 percent in October of 2008.”
Kanzleiter’s assessment, which is based on square footage, as opposed to the number of stores, puts the vacancy rate at 6 percent, which is better than the national average. Calculated by square footage, the vacancy rate for regional shopping malls is 8.8 percent, according to Reis, Inc., a New York City company that tracks commercial real estate and surveys 90 percent of the regional malls in the country.
In the Nittany Mall’s case, the smaller store spaces are vacant, while the larger stores remain occupied. While 94 percent of the mall’s total square footage is in use, the big department stores keep that number high. When you remove them from equation, 84 percent of the square footage is occupied.
As the Nittany Mall continues to weather a tough retail environment, it has plenty on its side. There’s a dearth of shopping malls in the area; the nearest competing mall is 40 miles away, according to the website for Pennsylvania Real Estate Investment Trust, the mall’s owner.
Indeed, for Kristyn Hinkle, shopping at the mall comes down to one factor: necessity. “Being a Penn State student I do most of my shopping downtown,” she said. “I love the local shops and products you can get downtown, but I come out to the mall for to shop at the national chains.”
Retailers like Gardner’s Candies know that customers like Hinkle may come for the big names. But the hope is that they’ll wander into a few other stores, too.
“The Nittany Mall location is our only location in the State College area,” said Sam Phillips, president of Gardner’s Candies. “It is a great place to draw customers who may come to the mall to shop somewhere else and end up in our store. The location also attracts customers from all over the Centre Region.” Phillips said the company plans to keep the Nittany Mall location for the near future.
Penn State University—and its thousands of potential customers—is another factor on the mall’s side. This is a market with income and buying power. In State College, the unemployment rate is just 5.6 percent—well under the reported statewide average of 8.1 percent. And Centre County consistently has one of the lowest unemployment rates in the state at 7.2 percent.
Those factors won’t mean much, however, if the mall doesn’t give people enough reasons to show up.
“It’s important to have a mix of national, regional and local retailers,” Kanzleiter said. He contends that the mall is always open to changing things up a bit to attract customers. That includes finding “a variety of new and innovative local tenants including specialty boutiques, specialty foods and restaurants,” he said, adding that the mix must appeal to both local residents and Penn State students.
According to Kanzleiter, Nittany Nails is set to open in December of this year.
While the mall has gained stores and lost others, much has remained unchanged. In 2008 and 2009, the focus was to retain its existing retailers, Kanzleiter said. By that measure, the mall has been mostly successful.
Matthew Groves is a StateCollege.com intern.
