Malls are a hot property. Who knew?
Investors in commercial real estate are enjoying a bit of an industry revival in 2026 after a four-year slump. That’s what my trusty spreadsheet found when it reviewed July’s Green Street investment performance report for 12 slices of “institutional” properties nationwide — primarily large investments controlled by major property owners. Green Street’s main property index was up 5% in the past year, though it remains 13% off its 2022 peak.
But the price recovery was not uniform. And the past year’s best real estate investments, according to Green Street, could be seen as a signal of hope for any investor betting on a reversal of fortunes.
Topping the list? The mall. Yes, those shopping centers everyone thought were on life support are making a comeback.
Green Street says mall values rose 12% in the past year – the top result among the 12 niches tracked. And mall values are 3% above the 2022 peak, also the industry’s top results as the only price-gaining niche in these four years.
Why? Many struggling malls have closed or been torn down. At the same time, shoppers with money in their pockets are getting bored with online shopping and heading back to brick-and-mortar stores. That shift is helping malls that offer a good mix of shops, restaurants and entertainment.
This retailing revival, at least in investors’ eyes, is reinforced by the second-best performer on Green Street’s rankings: strip malls, the smaller cousins of the giant shopping hubs.
Neighborhood shopping centers saw their values climb 9% over the past year and are now just 2% shy of their 2022 high. Strip mall owners have bounced back by filling empty spaces with all kinds of services, from doctor’s offices to gyms to beauty salons.
Not all investors in retail locations have enjoyed a bounce-back from their lows.
Then there are the so-called “net lease” properties, primarily the standalone shops you see in shopping center parking lots. These real estate bets had the second-worst performance this year.
Because these properties depend on just one tenant, they’re especially sensitive to economic ups and downs. The slump in drugstores, for example, has really hurt this group.
So, net-lease real estate values were up only 1% in the past year – second-worst among the 12 niches – and have tumbled 18% from the 2022 peak – the fourth-worst dip.
By the way, the worst-performing commercial real estate niche? Apartments, with flat values in the year.
Rental housing is the lone asset group that saw no value gains over those 12 months. And apartment values are down 19% in four years, the industry’s third-biggest decline.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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