America has lost 200 malls since 2008. Now the survivors are becoming Gen Z hangouts

There is a couch outside the fitting rooms at nearly every mall in America, and for decades it looked like the least productive real estate in the building.

No inventory.

No margin.

Just someone’s better half sitting with a pile of bags and time to kill.

Paco Underhill, who has worked with shopping malls in more than 30 countries and wrote the 2004 book Call of the Mall , coined a phrase for it: “a parking lot for two-legged pets.” “A two-legged pet could be a boyfriend, or it could be your mother, or it could be a grandfather,” Underhill, often called the “godfather of retail anthropology,” told Fortune .

Give that companion a couch, he said, and the shopper they came with may stay longer.

That overlooked piece of furniture is now close to a business strategy.

Data from commercial real estate analytics firm Green Street first reported by The Wall Street Journal capture the industry’s reversal: An estimated 200 malls have closed since 2008, but values for the survivors have climbed 13% over the past year—the strongest gain of any major commercial real estate sector.

Indoor-mall visits from January through August also rose 2.5% from the same period last year, bringing traffic within 1.3% of its pre-pandemic 2019 level, according to data Placer.ai provided to Fortune .

Instead of simply giving people somewhere to shop, the new mall gives them a reason to make a day of it, trading the old department-store formula for restaurants, gyms, entertainment, beauty services, and even apartments.

The business of hanging out More than two decades after Underhill wrote Call of the Mall , his critique looks newly relevant.

The traditional American mall, he argues, was an “incomplete solution.” Department stores helped developers secure financing and attracted shoppers, but they also dictated which businesses could move in.

“They were very clear: I don’t want drugstores.

I don’t want a hardware store.