2 of 10 U.S. shopping malls are unhealthy or dying

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dead mall
Facts and figures from Michael F. McElroy’s “The Economics (and Nostalgia) of Dead Malls,” New York Times, Jan. 3, 2015:

  • Since 2010, more than two dozen enclosed shopping malls have been closed, and an additional 60 are on the brink, according to Green Street Advisors that tracks the mall industry.
  • Almost one-fifth of America’s enclosed malls have vacancy rates of 10% or greater, considered troubling by real estate experts. Nearly 15% are 10 to 40% vacant, up from 5% in 2006.
  • 3.4% of malls are considered to be dying — with 40% vacancies or higher. That is up from less than 1% in 2006.
  • About 80% of the country’s 1,200 malls are considered healthy, reporting vacancy rates of 10% or less. But that compares with 94% in 2006.
  • U.S. malls are bifurcating: With income inequality continuing to widen, high-end malls are thriving, even as stolid retail chains like Sears, Kmart and J. C. Penney falter, taking the middle- and working-class malls they anchored with them. Green Street senior analyst D. J. Busch: Americans will keep going to malls “aimed at the top 5% or 10% of consumers. But there’s been very little income growth in the belly of the economy.”

Causes of the death of malls:

  1. It’s not the Internet: Online shopping is only a small reason for dying malls, experts say. Less than 10% of retail sales take place online, and those sales tend to hit big-box stores harder, rather than the fashion chains and other specialty retailers in enclosed malls.
  2. The fundamental problem for malls is a glut of stores in many parts of the country, the result of a long boom in building retail space of all kinds. “We are extremely over-retailed,” said Christopher Zahas, a real estate economist and urban planner in Portland, Ore. “Filling a million square feet is a tall order.”
  3. “I have no doubt some malls will survive, but major segments of our society have gotten sick of them,” said Mark Hinshaw, a Seattle architect, urban planner and author.

H/t ZeroHedge

~Eowyn

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0 responses to “2 of 10 U.S. shopping malls are unhealthy or dying

  1. Wonderful post! This certainly reflects what we are actually seeing. Interesting quote regarding malls from that one gentleman . . . “major segments of our society have gotten sick of them.” I certainly vote for that sentiment. When I was young, it was wonderful to walk the malls; now that I am a senior citizen–it’s not so wonderful. Seeing herds of young thugs, seeing the news that a shooting was perpetrated at this mall or that, and sometimes the walking (carrying packages) from one end of the mall to the other if just plain overwhelming. In the 1950’s my parents purchased from the Sears & Roebuck, and the Montgomery Ward catalogs. Item’s from Sears were delivered, items from Wards, my Father would drive over to pick up at their distribution site. I find that I have reverted to ordering from catalogs (on-line) and just having the stuff delivered. I therefore avoid the herds of thugs, any crazies who want to go on a shooting spree, and my UPS guy is kind enough to carry packages (if there are to many at one time) right into my front room. I am sure that many other older individuals feel the same way I do–sit back and shop from home.

     
  2. I like Auntie LuLu’s comments. I am probably not as old as she is. I did not grow up with the attitude that shopping was a form of recreation and going to the mall to ‘shop till you drop’ was not on our radar. Because of budget restraints, medical issues, etc. I have not shopped all that much over the years. Second had stores are my favorites for office attire. Now that I am retired to a farm, the local farm and home store has all the clothes (think jeans, t’s, insulated coveralls, insulated boots, etc) I need along with our sheep and cattle supplies. I for one am glad to see malls go the way of the buggy whip. However, the main reason malls are going under is that we, as a people, are not having enough babies to replace ourselves at alone grow an economy. Importing immigrants, especially illegals who send their money out of the country, will not accomplish this because they no longer assimiliate into our culture and therefore will change our country for the worst. Unlike the immigrants of my parents and grandparents generation who came here for a better life and to assimiliate into the American culture.

     
  3. Life is dying because evil is killing the world …Real news posted Daily…
    https://plus.google.com/b/116682049077642552911/116682049077642552911/posts

     
  4. I prefer to shop at local stores whenever possible,also the second hand stores,and a couple of small feed stores. Shopping the local stores means higher prices and less to choose from,but I actually know the owners of most of ’em,so at least I’m supporting people I can see on the street and say “Hi” to. Some of the other stores I go to aren’t “local”,but they’re a looooong ways down the list of “Big Chain Stores”. I LIKE stores that,if they don’t have what I’m looking for,don’t mind sending me to a competitor,who they probably bowl,golf or ride dirt bikes with.

     
    • “I prefer to shop at…also the second hand stores…” That’s all I’ve been able to afford for the past two years thanks to hopeandchange. Not that I don’t mind, the fiscal conservative in me likes a deal!

       
  5. No one’s looking at the number one cause of the demographic changes responsible for this: Abortion.

     
  6. There are only 1200 malls in the country?!?! I think there are one or two more than that.
    I also think they discount the internet sales more than what’s really happening. I know I will use the internet first. I hardly ever go out shopping at brick and mortar stores. I can even purchase ammo both tax free and shipping free, and price has YET to be beat locally. I use “ammo” as an example, because loaded rounds of ammo are really heavy, so you would think the shipping would kill you. I just wait until they have a “Free shipping” deal, and then I buy a bunch. Why use the gas in the car?
    Also, I will go to a strip center store, but I avoid the mall all together. Everything at the mall tends to be MUCH more expensive if its available somewhere (anywhere) else. So the “mall” is my choice of “last resort”. They are too big, too expensive, too impersonal, and to hard to park at.

     
  7. Dr., Thank you very much. Fantastic article

     
  8. Thank you Dr. Eowyn for this interesting post. I have noticed that there are many specialty stores with very high prices in the mall.

     

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