The nation's largest mall owner is investing millions in upgrades in one of the country's most in-demand retail hubs, a high-stakes example of how landlords are remaking aging properties to edge out competitors in attracting tenants and shoppers.
In the affluent suburbs of Orange County, California, where retail demand is outpacing the property supply and rents are climbing, Simon Property Group is responding particularly strongly to growing competition for retailers to occupy space by adding new stores and restaurants at two of its existing malls.
The company has submitted plans for a nearly 50,000-square-foot open-air lifestyle village at The Shops at Mission Viejo, with new additions ranging from large-format stores for growing retailers Arhaus and Uniqlo to open-format restaurant spaces for trendy eateries North Italia and Pacific Catch. A completion date is set for late 2026 at the high-traffic location.
A similar multimillion-dollar overhaul is underway at the Indianapolis-based REIT's nearby Brea Mall, where Simon is converting a former Sears and adjacent parking lots into a walkable outdoor complex that will resemble less of a mall and more of a new urban core for the city when finished, complete with new restaurants, stores and homes. Shoppers will be able to stroll through an outdoor plaza with palm trees and other greenery — as opposed to an outdated mall interior — and visit new spaces from an Alo Yoga clothing store to a high-end Life Time gym.
With virtually no new malls under construction across the United States, landlords are overhauling existing properties by replacing vacant department stores, demolishing underused sections, and reimagining sites as mixed-use destinations with housing, hotels, offices and modern retail tailored to their area. The projects respond to declining foot traffic and shifting consumer preferences at older malls, such as Kushner Cos.' $500 million conversion of an aging enclosed mall in New Jersey into a mixed-use lifestyle district.
In Orange County, strong underlying retail fundamentals are helping to lure a new wave of investment. Retail space availability in the market fell to 3.9% in the second quarter of 2025, one of the tightest rates in the nation and a 16-year low, according to CoStar. The higher national availability rate of 4.8% has edged up this year as Orange County’s has dropped even further.
“Outdoor living is such an integral part of the Orange County lifestyle, and creating more open-air experiences is a significant point of emphasis in our plans,” Patsy Sanquist, general manager at The Shops at Mission Viejo, said in a statement.
To be clear, not all malls are receiving this level of retail reinvestment. Aging centers in less affluent or less strategic locations — such as Orange County's Westminster Mall at 1025-2015 Westminster Mall — are being entirely redeveloped as multifamily housing with limited retail. But for well-located properties with strong demographics, owners are putting capital to work, Hammond said.
Reinvesting in suburbs
Landlords in Orange County want to land leases by touting in-demand features among consumers — from open-air gathering spots to a diverse shopping roster complete with immersive stores — according to Matt Hammond, partner and senior vice president at Coreland Companies, a Tustin, California-based property management firm and brokerage active in the area.
“Consumers are prioritizing value more than ever, and at Brea and Mission Viejo, that value comes in the form of experience,” Hammond told CoStar News. “These renovations are about dining, entertainment, and a reason to gather. That’s what people are looking for now —especially in suburban markets with a lot of work-from-home professionals.”
The Orange County improvements are part of a broader strategy by Simon, the nation’s largest mall owner, to reinvest in and reposition aging but well-located suburban properties across its portfolio. CEO and Chairman David Simon told investors the company is focused on backfilling vacancies and attracting new categories of tenants.
The two properties Simon is transforming have long been steady and reliable, if aging, retail performers, according to experts. The Shops at Mission Viejo spans 1.3 million square feet and was built in 1979; its last major renovation was in 2000. Today, it is home to traditional mall anchors Macy’s, Nordstrom, Dick’s Sporting Goods and Old Navy, alongside restaurants such as The Cheesecake Factory and P.F. Chang’s.
Simon’s planned expansion of the Mission Viejo mall will add tenants like Pacific Catch, FP Movement, Arhaus and Baseballism, with more first-to-market retailers expected. The project will also create an open-air zone with outdoor restaurant seating and exterior-facing storefronts to enhance walkability and encourage longer visits.
About 30 miles up the freeway, the million-square-foot Brea Mall — built in 1977 and last upgraded in 2014 — is getting a 119,000-square-foot addition, which will include a palm-lined outdoor plaza with soft seating and shaded gathering areas.
To complement anchors JCPenney, Macy’s and Nordstrom, Simon is adding popular California dining outposts North Italia, Din Tai Fung and Kalbi Social Club. The redevelopment also brings in a Life Time gym and fashion retailers including Alo Yoga, The North Face and Evereve.
Experience wins
Ground-up retail development is scarce across the country and in Southern California. Orange County hasn’t seen over 100,000 square feet under construction since late 2018, according to Cushman & Wakefield. And leasing is strong: Landlords inked more than 750,000 square feet in the fourth quarter of 2024 alone, with demand spilling into 2025.
New projects like Almquist Developers' River Street Marketplace at 31896 Paseo Adelanto in San Juan Capistrano have added pressure to the supply-demand imbalance. The open-air project debuted in 2024 with tenants such as Mendocino Farms, Free People, Capistrano Brewing and McConnell’s Ice Cream, with many of those tenants signing pre-lease deals.
Meanwhile the Segerstrom family, owner of Orange County powerhouse mall South Coast Plaza, is asking the city of Santa Ana for permission to develop The Village Santa Ana, a 17.2-acre site with up to 1,583 residential units, up to 300,000 square feet of office space, up to 80,000 square feet of retail space, and approximately 13.8 acres of public and private open space adjacent to the high-end enclosed mall. The site aims to create a new community gathering area, replacing an outdated retail strip with some vacancies.
Orange County retail space is leasing faster than at any point in recent years, with the average time on the market down to seven months — more than three months faster than in 2022 and in line with pre-pandemic norms. High demand in the third and fourth quarters of 2024 helped drive the decline in availability, according to CoStar data.