• Wall Street Journal, Thursday, February 26, 2009 10:45 AM

Vacancy rates at U.S. malls climbed to 7.1% in the fourth quarter, the highest rate since Reis Inc. started tracking the figure in 2000, and many are reinventing themselves to stay relevant, Kris Hudson reports.

Weaker malls that struggled prior to the recession are recruiting unorthodox tenants, such as community colleges and libraries. Some are even welcoming big discounters, embracing the crowds they draw even as some tenants complain the discounters siphon sales away from small-shop operators.

Many malls are rethinking their original anchor-tenant formats as department stores disappear. Luxury mall owner Taubman Centers recruited tenants such as P.F. Chang's China Bistro and Barnes & Noble, among others, to replace departed department stores in Dearborn, Mich., and Stamford, Conn.

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