A US mall owner is renting out its parking lots for drive-in movie theaters and concerts as it finds creative ways to make money as the retail sector continues to be squeezed

• US mall owner Brookfield Properties has signed a deal with an events company to bring drive-in theaters, showing outdoor movies and concerts to its parking lots.
• These outdoor venues are currently being offered at 3 US malls but Brookfield has plans to roll this out further.
• Its decision to diversify its business comes as the retail sector continues to be battered by the coronavirus pandemic.

Mall owners in the US are starting to get more creative about how they can make money during the coronavirus pandemic as the retail sector continues to be hit hard.

Brookfield Properties, which owns over 170 retail locations in the US, recently signed a deal with events company Kilburn Live to bring drive-in theaters, showing outdoor movies and concerts, to its parking lots. CNBC was first to report the news.

"If we can't rent the mall, we are going to rent other space," Michelle Snyder, chief marketing officer of Brookfield Properties told CNBC's Lauren Thomas. "We actually have tons of ideas for our parking lots," she said.

A spokesperson for Brookfield told Business Insider that these outdoor venues are currently set up at three of its malls in Denver, Minneapolis, and Dallas. However, they have plans to roll this out to more locations in the future.

Kilburn Live will lease the space to host these events in the same way that a retailer might lease a store space inside the mall.

"As with all of our tenants, it is our job to do everything we can to help make them successful in our shopping center communities. Kilburn, however, will handle all of the logistics, from the technology, films and the ability to stream Bluetooth in your car, etc.

"Since the pop-up cinemas have been incredibly popular in our communities, our teams are exploring opportunities to collaborate with our dining tenants to bring food kiosks in the parking lot. Who doesn't love dinner and a movie?" Snyder wrote in an email to Business Insider.

She continued: "These have been challenging times for everyone and we are happy to bring a sense of joy, fun, and a little normalcy to our communities. We are Brookfield. This is what we do. This is the time to be creative, innovative and there for our communities."

Walmart is offering a similar service in its own parking lots. Earlier this month, it said 160 of its stores will open outdoor drive-in movie theaters in their parking lots between the months of August and October. Customers will also be able to order food and drinks via curbside pickup so they have supplies for the movie.

The decision for Brookfield to diversify its business comes as the retail sector continues to be battered by the coronavirus pandemic. Experts say that malls are in a particularly vulnerable position at the moment as some of their top occupants – department stores and apparel retailers, which are often anchor tenants – are coming under increased pressure from COVID-19.

While others have simply refused to pay their rent during the lockdown as their stores remained closed.

Business Insider's Hayley Peterson recently reported on this issue, citing data from Green Street Advisors, which expects more than half of mall-based department stores to close by the end of 2021, leading to "excessive dark mall anchor space."

In a recent report, Coresight Research estimated that as many as 25,000 stores could close in the US this year and that around 55% to 60% of these stores will be located in malls.

There is a secondary issue to this too in that if larger stores close, other retailers might follow suit if foot traffic slows or try to renegotiate for lower rents.