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America’s malls are rotting away

12 December 2017

From CNN:

As Macy’s, JCPenney, Sears and other major department stores close their doors, the malls that housed those stores are facing a serious crisis.

That’s because when so-called anchor tenants leave a mall, it opens the door for other stores to break their leases or negotiate much cheaper rent.

As one big store closes, it can take several smaller stores along with it like a house of cards. Experts predict that a quarter of American malls will close in five years — around 300 out of 1,100 that currently exist.

. . . .

Retailers often sign co-tenancy agreements in their leases with malls, allowing them to reduce their rent or get out of a lease if a big store closes.

That’s because the smaller retailers next to anchor stores no longer benefit from the foot traffic that the major retailers received, according to Garrick Brown, vice president of retail research for Cushman & Wakefield.

. . . .

Many former anchor tenants are closing hundreds of stores as Amazon eats their lunch.

Sears, which had operated nearly 3,800 stores as recently as a decade ago is now down to 1,104 stores. Macy’s closed 68 stores this year, and JCPenney was set to shutter 128.

. . . .

Experts classify malls into “A” “B” “C” and “D” grades characterized in part by sales per square footage of the malls. “B” malls and below are going to have a particularly hard time with the financial burden of the changing mall landscape.

Link to the rest at CNN

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27 Comments to “America’s malls are rotting away”

  1. When I went home for a visit a few weeks ago, I stopped by the mall on a Friday night expecting to run into every teenager and adult chaperone in the area. Boy, was I wrong. Friday and Saturday nights were always busy but that night could have been a Monday morning on a snow day. It was dead.

  2. Malls killed main street stores. Now internet is killing malls. Karma bites.

    • Karma has nothing to do with it.
      People just keep expecting the future to be just like the present but with a different calender.

      No matter how often they see others get blindsided by change, they keep thinking it won’t happen to *them*.

      As Clint Eastwood said in UNFORGIVEN: “We all got it coming”.

  3. They need to think of alternate uses (housing anyone?) for these large indoor airconditioned spaces before they deteriorate physically by being abandoned.

    Schools? Light manufacturing? Offices? Places where you can fly your drone which don’t have the wind problem? I dunno. Something which would make me leave home and go there. I don’t/can’t shop, and haven’t been to one in years.

    If they find a non-profit use, possibly the property taxes – and costs – could be lowered.

    Having to pump much money INTO the situation would make it untenable as a solution.

    • “They need to think of alternate uses (housing anyone?)”

      I thought of that not too long ago as well. Many places are having a housing crisis, not enough housing to meet the demands of the population. Meanwhile, malls are being emptied. It seems like a simple solution to do a little rezoning and remodeling.

      • I’ve talked to people who have looked into that. The trouble is that residential building codes are very restrictive, and in completely different ways than commercial codes: different electrical requirements, much more plumbing needed, every bedroom must have a window, etc., etc., etc. Even with office buildings, which you’d suppose would be easily converted into apartments, I’m told it’s often cheaper to tear down the building and build the apartments from scratch.

        Malls, with their huge interior spaces far from any outside light or ventilation, would be impossible to repurpose as residential. Around here, a number of malls have been demolished in recent years, and yes, some of them have been replaced by condo towers. (Others have been replaced by strips of big-box stores, which are now facing their own problems. C’est la guerre.)

      • I’ve built financial models for retail businesses that were undergoing a redesign. Architects insisted to me that to be safe the $/sq.ft. for remodeling a business space should be forecast at the same cost as a new build. It seems that frequently there are unexpected costs that end up making remodels cost as much as new builds. That is without changing use to residential. I doubt that lowers the costs.

        I looked into renting some space in a mall a long time ago. The rental costs plus the take of revenues was crazy high for a location that was decent, but not great and already had some openings. This was being run by one of the major mall developers. Given the changed retail situation, I suspect the mall operators are asking for rents in many locations that are above what will be sustainable for most retailers.

    • It would be nice just to have a kind of indoor park like space to let kids run around in in the winter. Maybe have a place for dogs, too. Plus drones, soccer, etc. Not sure how to monetize it, though. Maybe towns could pay for it like a park or pool.

      • A few years back there was a story about an indoor Universal/Dreamworks theme park going to be built in some huge mall in New Jersey that was vacant. That seemed like a potential success story, with the content of Dreamworks and plenty of indoor space to avoid weather issues in the winter.

  4. What happens to a mall depends on the value of it’s real estate. In Mountain View, where Google has driven up real estate prices, failed malls disappear like morning dew…


  5. Maybe thirty years ago I decided going to a mall was an unpleasant thing I didn’t want to do any more. My wife gave up maybe twenty years ago. They didn’t have anything we couldn’t get at other stores that didn’t require long hikes from the parking lot and shoving through crowds of people.

    I have better things to do with my time and money than to go to a mall.

    • I didn’t like going even as a teenager, when the mall was the place to be.

      I do visit part of the mall maybe 1-2 times yearly: the movie theater. It has an outside entrance, so I never have to enter the mall itself. 🙂

  6. There are lots of things I might like to see the old mall used for, but I doubt anyone wants to pay to do it. Many malls have seen extensive development around them, so the value of the real estate has increased since they were built. The owners will do whatever makes the balance sheet as healthy as possible, where healthy can be pretty sick.

  7. Most of these reports keep pinning Mall failures on Amazon and online shopping but the reality is far more complex.
    Malls, like B&N bookstores have been in decline since long before Amazon’s ascendancy. It’s not even as simple as overbuilding or mismanagement though both feature into it.

    There is an entire series of short films on YouTube by Bright Sun Films documenting the fall of many malls and retailers and the decline of most goes back to the 90’s or earlier and all show the same general trends.
    (A typical one is the story of Randall Park Mall in northeast Ohio.)

    The root cause of the decline of middle class malls is that they thrived in the 70’s and 80’s due to a combination of factors that have since faded. Those Malls were at heart an entertainment business. They wrapped a necessary experience–shopping–in onr-stop convenience and glitz to make it enjoyable and even fun. Window shopping, people watching, even socializing were all part of the show even for those who weren’t buying anything.

    Problem is, people have over the years found other amusements. Shopping has for most returned to being a necessary activity to be carried out as quickly and efficiently as possible. (Which is where online shopping found traction.) First it was the rise of cable, DVD rentals, then social media, online gaming, binge video streaming…

    Hanging out at the mall lost its luster long before online shopping took hold this decade. Malls were already failing when online was mostly about cheap used item auctions, books and media, and specialty electronics.

    Hanging out at the Mall remained a timekilling thing only among those uninterested or unable to afford the newer entertainments. Gangs, for one. A common story among the ghost malls is how roving “lower class” teens scared off shoppers. In many cases this triggered a crackdown leading to lower hang-abouts leading to empty halls, a dying business vibe, and a death spiral.

    None of those failures had anything to do with online shopping, which is more along the lines of the last straw.

    As noted repeatedly, plenty of upscale and specialty malls survive by offering actual shopping benefits beyond generic merchandise and an appropriate environment for their narrower demographic. In other words, class-based targeting rather than trying to be all things to all people.

    Not exactly a healthy development but its what’s floating the boats.

    • Problem is, people have over the years found other amusements. Shopping has for most returned to being a necessary activity to be carried out as quickly and efficiently as possible.


      (Really excellent comment. Thank you, Felix J. Torres.)

      • Second that “excellent comment” comment, and would add “affordably” to quickly and efficiently.

    • Totally agree with your analysis.

      During one summer whilst still in college I had a receptionist job at a mall office in Memphis, TN. They stressed out constantly about the closings and trying to find new merchants to fill up the empty spaces. Even back then, half the stores were closed. Early 90s. Amazon didn’t do this.

  8. The long-ago closed Blue Hen Mall in Dover, DE, was turned into a very nice office park. Basically, a huge office building with a big parking lot, multiple entrances and indoor access to a lot of office suites. It’s actually pretty nice.

  9. Malls used to be the main places I could find bookstores in the Chicago area–Kroch’s & Brentano’s, B. Dalton, Waldens, etc. As those disappeared my interest in malls dwindled.

  10. One aspect that I rarely, if ever, see mentioned is the ever-increasing incidence of serious multiple chemical sensitivities among the general population. When you combine all the off-gassing chemicals from all of the stuff that’s for sale, cleaning products, and the various “…icides” that are used to kill everything from mold to insects to rodents, malls (especially older ones with poorer ventilation) are simply vast, toxic torture chambers for people like me.

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