After a devastating year for malls, landlords say shoppers are heading back in droves.
In March, foot traffic was up 86 percent at 50 shopping centers tracked by the data firm Placer.ai compared to the same month last year, according to the Wall Street Journal. But that was still 24 percent lower than it was in March 2019.
Mall owners say sales are also improving as shoppers look to get out of their houses and spend their government stimulus checks.
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“There’s no question things are better,” Bill Taubman, the president of Taubman Co., told the publication. “Sales are also better than anticipated four months ago.”
Landlords say that collection rates have also improved.
Ami Ziff, director for national retail at Time Equities — which owns eight malls and dozens of open-air shopping centers — said that collection rates are above 90 percent. Last April, after the first pandemic lockdowns set in, rent collections had dropped to 58 percent. They largely rebounded by the end of year.
He said he has also been signing new tenants, including healthcare providers and restaurants, at cheaper terms. Some mall owners also believe that they can benefit from deals negotiated where tenants pay a percentage of their monthly sales in rent.
Investors seem to be buying into a retail recovery as well. Shares of Simon Property Group Inc., which recently acquired Taubman, have risen 45 percent this year, per the publication.
Analysts say, however, that not all malls and shopping centers are equal. Those in places with little population growth and an oversupply of stores are likely to struggle.
[WSJ] — Keith Larsen