Surprise! Walmart has acquired Monroeville Mall near Pittsburgh

Walmart’s acquisition of Pittsburgh’s Monroeville Mall was unexpected but the investment can make financial sense in the long run given how valuations of Class B and C malls have plummeted over the past decade and how much of an upside can be realized by investing capital to redevelop them.

Walmart certainly has the real estate expertise to own and operate shopping centers but I would have envisioned a joint venture with a traditional retail developer to tackle ownership, redevelopment, leasing and operations of a mall. We might see that JV in the near future as the redevelopment of the site gets underway.

In the 1970s and 1980s, retail chains were owners and developers of shopping malls, such as Allied Stores Corp., R. H. Macy & Co., The May Department Store Co., Homart Development Company (a subsidiary of Sears), Federated Department Stores (now Macy's Inc.) and Dayton-Hudson Corp. (now Target Corp.). Is this a sign of more change in mall ownership or just a one-off opportunistic investment for Walmart?

We’ll have to wait to see how Walmart’s plan for Monroeville unfolds. With retail vacancy at an all-time low, there’s tremendous opportunity to redevelop retail space for more efficient configuration and uses, some of which will surely include housing to satisfy demands.

Read more: Walmart takes on role of mall landlord with acquisition (CoStar News)