Few businesses have undergone as many seismic changes in recent years as the enclosed mall industry. Where "big box" stores once stood, developers have created a mix of retail, dining, entertainment and other options. Many have also added apartments to their properties to create built-in traffic generators. As of August 2021, for example, a growing number of retail developers around the country have or are currently building residential housing alongside their existing malls.
Household names such as Simon Property Group, the nation’s largest mall owner, and other national real estate firms are complementing their traditional mall properties with new apartment units. The reason is twofold: these developers seek to attract both young adults and empty nesters to their new residential projects while also providing needed housing in areas of the country where finding a well-located rental unit remains highly challenging. These developers also know that the creation of a residential community next to their mall can ensure the sustainability of our retail future.
Orange County is one such area where this is happening. While local housing costs have climbed over the past few years, demand for new units has sharply outpaced the development of new apartment units in the county. Syracuse-based real estate firm Pyramid Management Group has owned the Galleria at Crystal Run in Wallkill since opening its doors in 1992. The company made a strategic decision many years ago to begin diversifying its property-level offerings beyond pure retail by adding entertainment, recreation, hospitality and residential components to its large Northeastern portfolio.
At Crystal Run, for example, Pyramid is working to facilitate the development of 224 new apartment units at the corner of Smith Road and Galleria Drive.
“We have felt for a very long time that a higher level of diversification is vital to our business as it is constantly changing. Shopping is just one of many things that our guests can accomplish at our properties, which now include apartments, hotels and other destination-type uses,” says Stephen J. Congel, CEO of Pyramid Management Group. “This also explains how our properties have truly become travel destinations and major economic drivers for their local communities.” In addition, the development’s location near a mass transit station also makes it very attractive to potential tenants who also commute.
The calculus behind where people choose to live and work is incredibly complex. One thing we know for certain is that walkability—meaning the proximity of dining, movie theaters and other services to where someone lives—is becoming more valuable to potential renters who no longer want to live 30 minutes away from their favorite destinations.
As the largest mall owner in the Northeastern US, Pyramid has been a good neighbor. The firm has more than five decades in business, and is renowned for staying ahead of the curve. The addition of residential living units at Galleria Crystal Run will help the property recover from COVID and position it for success decades into the future.
Economic development covers a broad spectrum of needs. And while the Orange County Partnership’s mission is largely industrial and office, it is critically important that we continue to recognize the benefits and the positive economic impacts that our retailers and housing developers bring to the region.
