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]