Retail revival: What it takes to bring shopping plazas back to life

Hyde Park Plaza in Allegheny Township was on the ropes a few years ago.

A shuttered Kmart was eating up 85,000 square feet of retail space. Only six of 16 storefronts were filled. Label Shopper, a discount clothing retailer in the vein of Marshalls and TJ Maxx, was the closest thing the plaza had to an anchor.

Then, it caught the wave of strip shopping center resurgence.

Local developer Jeff Paul, with more than 20 years in commercial real estate, saw an opportunity in 2022 and purchased the property.

He has since refurbished parts of the plaza and replenished its ranks of big-name businesses with Aldi, Ollie’s Bargain Outlet, Dollar Tree and Bealls.

Paul did not respond to requests for comment for this report, but told TribLive in March he didn’t expect the center’s three remaining vacancies to last long.

It’s another story on the other side of the highway, where Allegheny Plaza languishes. The last tenant in the strip mall, the beleaguered Big Lots, left earlier this year, leaving only two occupied outparcel buildings.

The township’s two major plazas offer an extreme example of similar retail complexes meeting different fates.

But all over Southwestern Pennsylvania, these suburban cornerstones are seeing various levels of success and, in some cases, different uses.

The right time

Once seen as second fiddle to fancier, more upscale indoor shopping malls, strip malls are having a moment.

In January, Entrepreneur magazine proclaimed: “The lowly neighborhood strip mall might be the hottest new thing in commercial real estate.”

Data from Cushman & Wakefield, one of the world’s largest commercial real estate service firms, bears that out.

The national retail vacancy rate for strip shopping centers rose slightly to 5.5% in the first quarter of this year. That’s still lower than just about any time since the turn of the century, even as President Donald Trump’s tariffs destabilize domestic businesses selling imported merchandise.

Pittsburgh had that average beat at 4.7% vacancy.

And while it’s true that e-commerce has put pressure on physical retail — take the quickly vanishing traditional department store, for example — in-person sales still make up about 80% of the market.

“E-commerce, it grows every year, but I don’t think it’s ever going to be 80% e-commerce, 20% retail,” said Greg Zakowicz, senior e-commerce expert at automated marketing firm Omnisend.

Older people, he noted, prefer physical retail as a force of habit, while younger people gravitate toward it for the social aspect. Kids have vanishingly few places to gather outside of their homes, making wandering the aisles of the local superstore a common pastime for America’s youth.

Plazas also fill a void created by the decline of enclosed malls. In the Pittsburgh region, only Ross Park Mall and South Hills Village can really lay claim to having a full cast of recognizable stores and restaurants.

“I used to go to the mall,” said Linda Oblack, 62, of Washington Township as she shopped for ferns at Roses in the Hillcrest Shopping Center. “But things change.”

In Hempfield, the former Greengate Mall on Route 30 was razed decades ago in favor of a strip shopping center featuring Walmart, Sam’s Club and a host of other tenants.

The Pittsburgh Mills mall, once touted as a jewel of retail and dining in Frazer just off the Route 28 Expressway, is all but a shell with a 75% vacancy rate and nearly impassable roads.

Even long-standing icons of local retail, like Monroeville Mall, are on the verge of major upheaval. Long-range plans for Monroeville Mall, purchased by a firm affiliated with Walmart, also contemplate moving from an enclosed mall to a strip shopping center development à la what happened at Greengate.

The changing face of retail is kindling faith in communities that don’t boast a mall.

Lower Burrell officials are holding out hope a diminished Hillcrest Shopping Center there could see an influx of tenants following its purchase by Nassimi Realty, a real estate firm out of New York City. So far, that hasn’t happened. Nassimi officials did not respond to requests for comment.

Parts of the Heights Plaza Shopping Center in Harrison, long seen as diminishing after anchor Macy’s moved to the Pittsburgh Mills mall, are set to be demolished to make room for apartments. The plaza came under Benbrooke Realty Investment Co. ownership in 2022, another New York-based group.

In Westmoreland County, Latrobe 30 Shoppes in Unity Township is going strong, even as it rebuilds after a fire last year damaged several storefronts.

Manager Ralph Scalise said he is in talks for two recognizable companies to split a former Rite Aid space and has received interest in the smaller spaces reconstructed after the blaze.

“I’m hoping to be able to land one this Friday,” he told TribLive in late April. “There’s a good rebirth coming.”

The right stores

While shopping centers may contain a few small businesses, they’re mostly populated by national chains that can be found just about anywhere. In other words, plazas rarely offer one-of-a-kind amenities, so a balanced mix of tenants becomes key to attracting customers.

Grocery stores are common anchors, but they can make for a double-edged sword.

Everybody needs to eat, so grocers can draw repeat customers. But they operate on notoriously slim profit margins and require a high volume of shoppers, making them susceptible to competition, hence their propensity for exclusivity agreements.

And, of course, shoppers love a good bargain.

“There has just been a massive amount of demand for off-price retailers,” said Robb Paltz, associate managing director at Moody’s, using the industry term for discount stores. “Whether you’re on a budget or have a very strong affluence, everyone loves (them). They love the treasure hunting.”

Attracting a diverse mix of quality stores takes money. Regular maintenance and ongoing, multimillion-dollar repairs — some of which were going to happen anyway — have helped drum up interest in Latrobe 30 Shoppes, according to Scalise.

“You’re out looking for a car and you see this car that’s all detailed and nice and shiny. And then you see this other car that’s not quite as nice,” he said. “Which one are you going to buy?”

The right place

Developers have to know their market. Income, age and a host of other demographic factors all influence shopping habits, but none of that matters if there flat-out aren’t enough shoppers to support businesses.

“If you’re moving a Dollar Tree into Beverly Hills,” said Zakowicz, of Omnisend. “Probably not the best idea.”

Southwestern Pennsylvania is covered in dollar stores. So why did Lisa Ferguson, 55, of Allegheny Township choose to shop at the Dollar Tree in Hyde Park Plaza one morning last month?

“Just because it’s the closest one available,” she explained.

Convenience is king for shoppers. But there’s more to it than distance.

Tricky turns across traffic, insufficient parking or poorly timed traffic lights all deter customers, Paltz noted. The next plaza may be a longer drive, but some customers are willing to make that trade-off to spare the frustration.

“The nuances around it are just so specific and so impactful,” Paltz said. “You can go down your main boulevard and, in between lights, see things dying, and you get to the light and have an amazing center.”

David Rosen is president of Rosen Associates Management Corp., the New York-based firm that has owned Allegheny Plaza since the mid-1980s. He attributes the decline to the area’s relatively small population and a series of noncompete clauses once held by tenants.

Big Lots, for example, wouldn’t have allowed fellow discount retailer Ollie’s to enter the plaza. Giant Eagle also bought out the lease for a former Shop ’n Save in the plaza and kept it dark for years to box out the competition in what Rosen described as a “devastating blow.”

“That was the beginning of the downward spiral for Allegheny Plaza,” he said.

Despite these challenges, Rosen said he has no plans to sell.

“We are committed to the center,” he said. “We are committed to the community.”

The future of shopping plazas

Returning to the glory days of retail seems unlikely for some plazas.

A stoplight away from Hillcrest Shopping Center in Lower Burrell is Burrell Plaza, formerly home to JCPenney and Montgomery Ward. It’s full, albeit with different types of tenants. U-Haul and electrical supply company Schaedler Yesco now lease those storefronts.

Those who follow the trends could have a bright future, though, according to Zakowicz. The market is moving toward a so-called “lifestyle” model, where stores are accompanied by entertainment, such as street performers and art shows, along with higher-end dining options.

He also projected housing, like what’s planned for Heights Plaza, to become more common.

“It’s going to be outdoor plaza with some businesses there, but you’re going to see some condos or apartments attached to it,” he said.

Whether that’s possible everywhere is another question.

The goal for many communities is simply to fill vacancies.

“As a kid, you didn’t have to leave town for anything,” said Lower Burrell Councilman David Stoltz. “There were clothing stores, supermarkets, drug stores, an ice cream place. You name it, we had it.

“People are tired of leaving town to do what they want to do.”