At least 10% of U.S. malls are doomed: retail execs

New York /
May.May 22, 2012 03:30 PM

In perhaps the latest sign that retail malls are going the way of the dinosaur, industry executives said a prediction that 10 percent of all U.S. malls would be gone in the next decade was too conservative, according to the Wall Street Journal.

Earlier this year, real estate research firm Green Street Advisors said it believed about 100 of the nation’s 1,000 large enclosed malls would be torn down or converted for another use (note: clarification appended). At the International Council of Shopping Centers, industry executives told the Journal that prediction was probably too low.

Thanks to the increase in online shopping, there are fewer tenants interested in new mall space. Those that are interested in the property type have largely been moving only into the most desirable locations. As a result, weaker properties are struggling.

“Malls have great land, so their intrinsic value as real estate is high,” said Pennsylvania Real Estate Investment Trust President Ed Glickman. “The question with that bottom 10 percent is whether we need those properties as traditional malls.”

But mall executives, including Macerich CEO Art Coppola, whose firm owns 64 malls, said that the consensus doesn’t necessarily mean the entire industry is on its deathbead. “For every mall that disappears, there is an existing mall that gets so much better that it is more economically impactful,” he said. [WSJ]


Related Articles

arrow_forward_ios
The grand reopening: As restrictions lift, CRE markets race toward recovery
The grand reopening: As restrictions lift, CRE markets race toward recovery
The grand reopening: As restrictions lift, CRE markets race toward recovery
The colorful Prizm Outlet in Nevada. (Prizm Outlet via Facebook)
Mall short-sellers see a big payout from Nevada mall auction
Mall short-sellers see a big payout from Nevada mall auction
Smaller retailers are snapping up Manhattan’s empty storefronts for shorter, cheaper leases (iStock)
Small retailers slip into city’s empty storefronts on the cheap
Small retailers slip into city’s empty storefronts on the cheap
Charlie Kushner, Laurent Morali, Nicole Kushner with Monmouth Mall (Google Maps, Sasha Maslov, Getty)
Kushners fend off rival developers for NJ mall
Kushners fend off rival developers for NJ mall
Urban Outfitters at 526 Avenue Of The Americas (Google Maps, Getty)
Urban Outfitters shutters longtime store near Union Square
Urban Outfitters shutters longtime store near Union Square
Retailers rush to open in the Hamptons
Retailers rush to open in the Hamptons
Retailers rush to open in the Hamptons
President & CEO of Northwood Investors with 520 and 524 Broadway. (Getty, Google Maps)
Northwood buys two Soho buildings for $325M
Northwood buys two Soho buildings for $325M
Many people are excited for shoppers to return, but many have switched to e-commerce. (Getty)
Is e-commerce king? Retailers reflect on pandemic changes during earnings calls
Is e-commerce king? Retailers reflect on pandemic changes during earnings calls
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...