Top-tier malls feeling pain of changing consumer behavior

Major landlords have signaled slowing growth

TRD NATIONAL /
Dec.December 26, 2019 04:00 PM
Beverly Center in Los Angeles (top) and The Mall at Short Hills in New Jersey (bottom) (Credit: Wikipedia, Google Maps)

Beverly Center in Los Angeles (top) and The Mall at Short Hills in New Jersey (bottom) (Credit: Wikipedia, Google Maps)

Top-tier malls are no longer immune from the perils facing the broader retail sector.

Landlords behind some malls in prime locations across America are now signaling slower income growth as they grapple with a shifting consumer landscape and internet competition, the Wall Street Journal reports.

Several malls have lowered their 2019 guidance on net income, for example. Some blamed a series of high-profile retail bankruptcies this year.

Taubman Centers, the owner of The Mall at Short Hills in New Jersey and Beverly Center in Los Angeles, lowered its 2019 guidance for net operating income growth to zero to 1% from 2%, according to the Journal.

“Forever 21’s bankruptcy has disproportionately impacted ‘A-malls’ and Taubman Centers specifically,” said CEO William Taubman.

The owner of King of Prussia mall in Pennsylvania and Phipps Plaza in Atlanta,
Simon Property Group, reduced its 2019 guidance on net income from an estimate of $7.04 to $7.14 per share to $6.76 to $6.81.

Analysts have largely viewed the approximately 260 top-tier malls across the country as safe from some of the forces toppling lower-tier malls in less wealthy locations, as high-end stores deliver an experience that consumers cannot get online.

But a series of retail bankruptcies this year has rippled across the spectrum of shopping centers.

There are also signs that revenue in malls is sagging even when they’re full, because landlords have been forced to reduce rents to keep tenants. [WSJ] — Sylvia Varnham O’Regan


Related Articles

arrow_forward_ios
Barry Sternlicht, Louis Joliet Mall (Credit: Google Maps and Cindy Ord/Getty Images for 1 Hotels)

Starwood loses control of another mall in default

Starwood loses control of another mall in default
66 Orland Square with GW Properties CEO Mitch Goltz and BlitzLake Partners CEO David Blitz (Google Maps)

Facing foreclosure, GW Properties hands over Orland Park shopping center

Facing foreclosure, GW Properties hands over Orland Park shopping center
Mayor Lori Lightfoot and a restaurant in downtown Chicago (Getty)

Chicago to ease capacity limits, open bars

Chicago to ease capacity limits, open bars
Jeff Bezos and 2420 South Halsted Street (Getty, Google Maps)

Amazon adds to Chicago presence with Bridgeport warehouse

Amazon adds to Chicago presence with Bridgeport warehouse
The former Target in Calumet City will be converted into a working farm (Google Maps)

For latest retail redevelopment, old Target will become new farm

For latest retail redevelopment, old Target will become new farm
Amazon CEO Jeff Bezos with 3507 W. 51st St. (Courtesy 42 Floors; Getty)

Amazon inks lease for Chicago warehouse; 12th statewide

Amazon inks lease for Chicago warehouse; 12th statewide
Prologis’ Hamid Moghadam and an aerial of 3501 120th Ave in Kenosha, Wisconsin (Prologis; Google Maps)

Prologis sells Amazon fulfillment center in Kenosha for record price

Prologis sells Amazon fulfillment center in Kenosha for record price
Jeff Bezos, Amazon facility at 15924 Western Ave in Markham, Illinois (Credit: Phillip Faraone/Getty Images and Google Maps)

Amazon to open 2 new massive fulfillment centers in Chicagoland

Amazon to open 2 new massive fulfillment centers in Chicagoland
arrow_forward_ios

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

Loading...