Last July, long before thepandemic hit, the coworking firm Industriousset up space at the Scottsdale Fashion Square. Later it inked dealsat other malls around the country. Now that COVID-19 has accelerated the problems inretail, Joe Brady, CEO Americas for The Instant Group, a workspaceinnovation firm, thinks more of these conversions could be on thehorizon.

"If you think about closed Searsboxes, or what's going to happen with the Neiman Marcus space, theproblems in retail are front and center at the moment," Brady says."We're seeing this intersection between people wanting to work nearhome, and what's happening with some of the struggles in malls andin retail with the big boxes."

Brady expects more groups,including shopping center REITs, to follow Industrious, which ispartially funded by Brookfield, by opening flex spaces in malls.These mall working spaces could fit as spokes in the hub-and-spokeoffice model. 

"We think that that makes anawful lot of sense," Brady says. "You've got some pain orchallenges on the mall side with excess space, and then you havepeople who want to get out of their house and work near home. Allof a sudden, this is a really interesting blended realestate." 

The accessibility of malls can bean attraction to cooped workers who may want to get out of thehouse, according to Brady. While these people may want to get outof their homes, they don't want to venture far.

"I think people have figured outover the last four months that they liked their families," Bradysays. "The idea of this work-life balance and getting off thehamster wheel is appealing to people.

COVID augmented changes inflexible working that Brady thinks will become permanent. "Thatacceleration of a decade's worth of change in four months is thisnotion that as knowledge workers, we should be judged on ouroutcomes or our actions," he says. "We can do some of those actionsfrom our home or from elsewhere." 

Malls also offer easy access forthese workers, which is helpful in this era of social distancing."Malls are car-friendly and not mass transit reliant," Brady says."In malls, you tend to have low- to mid-rise buildings, which arestair friendly and not elevator reliant."

Brady is intrigued by a blendedreal estate solution where there is a base mall with workspaces andeven multifamily.

"You may have some of the largerfitness centers, and then you may have a flexible, agile workenvironment as well," he says.

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