Macerich malls opens co-working spaces aimed at startups and large retailers

Mall operator Macerich is repurposing retail space across the country for companies who want a physical location for meetings, pop-up shops and back-office operations.

Macerich’s move — co-working startup Industrious will run the shared office spaces — is the latest response to the growing mall vacancy rate across the U.S. (reportedly 8.6 percent in the second quarter). As consumers increasingly shop online, malls offer co-working tenants a way to connect with retailers.

Art Coppola, Macerich’s CEO, said the company will put co-working spaces in an unspecified number of malls in its network of 48 shopping centers in the U.S., starting with 33,000 square feet inside Scottsdale, Ariz.-based Fashion Square in January.

Industrious CEO Jamie Hodari said the spaces could be used by startups wanting to test products or add a physical location to complement an e-commerce store; or by established companies wanting space for back-office operations. The challenge will be in developing one design that works for different types of companies and integrating the space within the mall while maintaining a sense of separateness, by, say, separate entrances, he said.

A recent Yardi study said the growth of co-working spaces is the result of cost pressures, rise of the gig economy, demand for flexible lease arrangements, and for large companies, a demand for flexibility. Malls as co-working spaces let companies share resources that results from mixed use of the space, including gyms and other facilities.

The mall as a co-working location for entrepreneurs is part of a trend towards membership-based flexible workspaces that “sit between a Starbucks and a WeWork,” said Ryan Broshar, managing director of Techstars Retail, which runs one of Target’s startup accelerator programs.