The coronavirus pandemic could be the nail in the coffin for many department stores (Photo by JEFF KOWALSKY/AFP via Getty Images)
If you’re looking for some post-lockdown retail therapy, your choices may be limited.
More than 50 percent of department stores anchoring shopping malls could permanently close within the next 12 months, according to a Green Street Advisors report cited by CNBC.
Anchor department stores are themselves key to the financial viability of mall properties, but closures could also trigger problems with smaller mall tenants.
Not only do anchor tenants bring in foot traffic to other stores, but many so-called in-line mall tenants have co-tenancy clauses in their leases allowing them to seek lower rents or break leases early if an anchor space goes vacant. That could force some malls themselves to shutter for good.
“Many malls will now be faced with multiple anchor vacancies, a tough place to come back from, especially in an environment where demand for space is virtually non-existent,” said Green Street Advisors analyst Vince Tibone.
There isn’t much investor confidence in the sector. The mall-heavy CMBX 6 index has tanked since the pandemic hit and landlords started to default on mall loans.
It’s no wonder that some mall operators and retailers want to re-open as soon as possible. Simon Property Group intends to re-open 49 malls across 10 states this weekend and Macy’s announced a plan to re-open 68 stores early next week. The retailer is aiming to open all 775 of its stores by the end of June. [CNBC] — Dennis Lynch
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May 02, 2020 at 11:00PM
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Half of mall-anchored department stores could close within a year - The Real Deal
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