In this blog, we will cover various costs to open and run a shopping center or build a shopping mall in the United States.
Did you know, there are approximately 120,000 malls in the US, and the number just goes up each day. They were constructed with the purpose of fun, shopping, and making jobs available to the surrounding communities.
Building a shopping mall is expensive, it demands $45 million to $250 million of capital investment. The Mall of America is an example of a $770 million construction project. Every mall, depending on the facilities it offers has different budgets. Fancy supercenters with lots of stores and extras might cost $355 million.
However, a smaller neighborhood mall could be built for just $6.5 million, giving about 10,000 square feet of space. The price ranges from how big the mall is to how many stores you have within. This article will discuss a few types of malls and budgets for construction.
Different Types of Malls in the US
Building a mall can be a tenacious task, with various factors like the cost, where it’s built, how it’s built, and who will rent space there are important vairables. It takes a team of experts, like builders, architects, and contractors, to do it right. Let’s explore some common Shopping center types and the possible construction cost of each:
Strip Malls
Strip malls are outdoor shopping areas usually shaped like a U or a straight line. They range from 9,000 to 22,000 square feet and can have as few as three stores or as many as 15. If you want to open a shopping mall like this, be ready to keep a budget of $250 to $470 per square foot. These malls are simple and often have glass storefronts with separate entrances. They’re popular for restaurants and small businesses. Building a strip mall can cost around $3.7 million, depending on its size and features.
Regional Malls
Regional malls are larger shopping centers that cost between $40 million and $170 million to build. They generally have at least two big anchor stores and offer a variety of dining options. This type of shopping center price can cost $370 to $480 per square foot. These malls attract mid to high-end retailers and usually have two floors. Some newer ones may have an open-air design.
Super Malls
There is the larger type of malls called the super regional malls that can be built at a cost of between $200 million and $350 million. They are roughly twice the size as regional malls and usually have high-end retail and entertainment options. Estimated cost of constructing a super-regional mall ranges between $350 to $650 per square foot. These malls have evolved into destinations in themselves, providing a multitude of retail and amusement options.
Vertical Malls
Vertical malls are taller buildings just like skyscrapers, but with retail stores distributed on all tiers. You will often find them in a “pent-up” city where space is scarce. The construction of a vertical mall consumes between $180 and $290 per square foot of space. This type of shopping mall plan includes offices, hotels, and even residential units, making them versatile spaces in urban environments.
Outlet Malls
Construction sites can be positioned far from the thronged zones to keep away from high property rent. It can take ~$300 to $500 per square foot to develop the outlet mall. A Shopping complex like this can be open-air or traditional in design, offering shoppers a wide selection of discounted goods.
Thorough Breakdown of The Cost to Build a Shopping Mall
The average cost of constructing a mall in the US is $25 million. Yet, the overall cost of the project depends on some factors as well. The costs of and materials considerably affect the total price of mall construction. For better estimates, the construction cost can be divided into different categories. These include soft costs, finishing costs, and labor costs, in addition to the build itself. The construction costs may be broadly classified as design, equipment, builders, and materials.
Architectural Design
Constructing a mall necessitates the expertise of a qualified architect. Architects play an important role in
- Maximizing space utilization
- Electing materials and finishes
- Managing the construction process
- Collaborating with structural engineers
- Finalizing blueprint drawings
- Making shopping mall floor plans
- Advising on contractor selection
Design expenses can comprise up to 19% of the total construction costs.
Hiring an architect in the US typically ranges from $45,000 to $85,000. Custom designs may cost up to $130,000. Other categories in this process and the associated cost are:
| Category | Description | Average Cost |
| Equipment | Includes cranes, cherry pickers, excavators | $2.5 – $3 million |
| Extras | Indirect fees and mark-ups | $25 million |
| Material Costs | Includes steel, concrete, interior wall materials | $10.5 million |
Contractor Costs
A contractor oversees the daily management of the shopping mall construction project. This role usually costs about 13% of the total budget, which is around $4.50 million. Additionally, a contractor may charge over $2.5 million in indirect fees and mark-ups. The contractor’s duties include:
- Getting all materials and services needed
- Choosing and hiring subcontractors
- Working with the architect and owner to review plans
- Obtaining all necessary permits and arranging utility installations
- Supervising all construction activities
- Cleaning up the construction site at the end.
Typically, this construction costs around $450 per square foot, but the national average for mall projects ranges from $300 to $550 per square foot. Furthermore, dealing with subcontractors to build shopping mall leads to more expenses. Here’s a rough idea-
| Painters | Critical for appearance and protection | $50 – $60 per hour |
| Electricians | Essential for electrical work | $30 – $140 per hour |
| Excavators | Necessary for site preparation | $70 – $90 per hour |
| Carpenters | Required for structural and finishing work | $40 – $90 per hour |
| Masons | Needed for masonry and stone work | $30 – $45 per hour |
| Structural Engineers | Determine building’s structural integrity | $450 – $2000 |
| Plumbers | Vital for plumbing systems | $100 per hour |
Additional Shopping Center Expenses
When you open shopping center, apart from the construction and hiring contractors and engineers, you also have to keep a budget for other expenses such as:
Parking Garage
Malls need ample parking space for the high volume of visitors they attract. A parking garage is essential because it accommodates more cars, which is especially useful for malls with limited space. Building a parking garage in a mall generally costs around $7.5 million, but for a traditional mall, it can go up to $12 million. Larger malls incur even higher costs. The general rule is one acre of parking for every 15,000 square feet of retail space. Parking garages are often built on multiple levels for space efficiency. The average cost of building a 150,000-square-foot parking garage is $9.5 to $15 million. The cost can rise to $30 million for a 250,000-square-foot parking garage with two underground levels due to the added elevator expenses.
Demolition and Permits
If existing buildings or parts thereof need removal, demolition costs should be factored in. Also, Several permits and approvals are necessary for mall construction, and their costs can significantly impact the budget if not planned for. Here’s a rough estimate
- Commercial demolition averages $5 to $10 per square foot
- Permit fees typically range from $0.25 to $0.70 per square foot, with total fees potentially reaching up to 7% of the project cost.
Shopping Mall Insurance Cost
Shopping mall insurance is really important for business owners. Malls have lots of shops, restaurants, offices, and other places. People come to malls for shopping, eating, and hanging out with friends. But malls can face risks like theft, damage, and accidents. So, it’s important for mall owners to get insurance. At Exceed Insurance, they have experts who can help you get the right insurance plan. What does shopping mall insurance cover? It protects your mall from things like fires, theft, water damage, storms, and accidents involving visitors.
The insurance also covers specific things:
- Property Coverage: Pays for damage to your mall and what’s inside.
- General Liability Insurance: Covers accidents involving visitors.
- Equipment/Machinery Breakdown Protection: Fixes broken equipment.
- Business Income Insurance: Helps when the mall has to close temporarily.
With the right insurance, mall owners can protect their businesses from unexpected problems and keep them running smoothly. The price for a standard policy with coverage of $1,500,000 per incident and $3,000,000 total, the cost can range from $85 to $200 per month.
Recommended read: All about Shopping Center Insurance
Conclusion
To operate and manage a shopping mall successfully, a considerable amount of money must be invested to ensure its long-term achievement. The answer to how much does a mall cost is that developers and business owners need to carefully plan and budget for expenses such as construction, permits, etc. Managing these costs well helps create retail spaces that meet the needs of shoppers.
The retail industry is booming as the customer is after exclusive shopping experience. Getting a clear grasp of where these costs come up during the mall construction and management helps developers, property owners, and operators to make wise choices for their projects.
Frequently Asked Questions
- Which Permits Do I Need To Build a Shopping Mall?
When starting the construction of a shopping mall, getting the right permits and licenses is really important. These legal requirements make sure the project follows local rules, keeping everyone safe. On average, in the United States, these fees can range from $12,000 to $70,000. They cover things like building permits, zoning permits, environmental permits, and occupancy permits.
- What are the average annual energy expenses for a shopping mall in the United States?
The average annual energy expenses for a shopping mall in the United States range from $2.50 to $4.00 per square foot. This includes electricity, heating, cooling, and water usage.
- What are the average costs of security and surveillance expenses for a shopping mall construction project?
The average cost of security and surveillance expenses ranges from $700,000 to $1 million. During the Building a shopping mall, the installation of security and surveillance includes surveillance cameras, access control systems, alarm systems, and hiring security personnel.
