About two years ago, Trademark Property Co. CEO Terry Montesi heard from a national real estate broker that there was a big, secret tenant interested in Galleria Dallas, which his firm operates. He eventually found out that it was not a typical retail tenant: It was Netflix.
Netflix was looking for the first locations for a concept called Netflix House, which includes a rotating selection of games or “experiences” based on shows such as “Stranger Things,” “Squid Game,” “Wednesday” and “One Piece.” The location in Dallas opens this week, and one at the King of Prussia mall near Philadelphia — in a former Lord & Taylor store — opened last month.
Both are around 100,000 square feet and have an area where people can sit down for food and beverages inspired by Netflix titles. They’re open to anyone to walk through for free, but guests have to pay to play games. The location in Dallas also has an arcade-style game room, and the Philadelphia location has VR Games, mini golf and a theater. A third is planned for Las Vegas in 2027, and the company hopes to open additional locations, though it’s unclear how many.
The initial Netflix House locations represent a desire from landlords to bring in experiential concepts to malls that recruit a younger crowd, rather than the traditional department store anchor.
Montesi and his team were compelled by the offer, as the mall had already been pushing to make Galleria Dallas even more of an entertainment destination. The mall already has an ice skating rink and has been adding more restaurants in recent years. The space Netflix eventually moved into was originally built for Marshall Fields and later housed Belk. Belk exited the market a couple years ago — Montesi said it was a very high-end, expensive store that didn’t work in the Dallas market.
Montesi said he has also seen other entertainment- or experience-based concepts, such as Round 1 and Dick’s House of Sports, take former department stores.
“The importance of department stores to the success of the shop tenants in malls has become less and less and less and less,” Montesi said, adding that alternatives often make the mall more of a diversified, interesting place for people to visit. “If we’re talking to tenants that we’re trying to lease space to at the Galleria — smaller tenants — I would think 95 out of 100 of them would probably rather have a big Netflix concept like this than just another department store.”