Malls going broke — and may stay there

[marmar]

from Minyanville:



Malls Go for Broke, May Still Go Broke
Andrew Jeffery Oct 23, 2008 8:30 am

Retailers, commercial real estate faltering.


As retailers batten down the hatches for what most finally agree will be a nasty economic slowdown, their landlords are scrambling to keep the lights on.

The Wall Street Journal reports mall and shopping-center owners are turning to unconventional advertising methods to keep cash coming in the door. Ads are popping up on food-court meal trays, parking-lot stalls and even vacant storefronts.

InWindow and WindowGain, 2 new companies in the alternative ad space, have landed big names on their clients’ previously vacuous retail space: Comcast (CMCSA), SAB Miller and Verizon (VZ) are all signed up.

Although cash flow from these new avenues pales in comparison to traditional rental income, it’s better than nothing. Owners, however, are reluctant to lock in such ads for long periods of time; instead; they're hoping new tenants will somehow turn up.

....(snip)....

Now that short term funding markets are frozen, even for credit-worthy borrowers, that business model is broken. Unable to tap new, cheap debt, property owners are turning to expensive bank lines of credit - or nothing at all. At best, this is squeezing margins; at worst, it's risking the viability of entire firms.

The ongoing economic slowdown, now far worse than most expected, won't help much either. Consumers are cutting back, retailers are closing stores and landlords will find rent harder and harder to collect.

Sayonara, strip mall mania. .........the complete piece is at: http://www.minyanville.com/articles/VZ-Credit-mortgage-shopping-CMCSA-commercial/index/a/19656

[NickB79]

1. Convert parts of them into low-income housing developments

And replace the 5000 Footlockers and Bed and Body Works stores you always find into independently-run stores selling things people actually need. Create a village center like you would find in a small-town setting.

[KamaAina]

8. They might actually be too desirable to be low-income developments

what with shopping and (in many suburban areas) a transit hub right on site.

One thing they definitely would be is sustainable. You may well be on to something here. :thumbsup:

[LeftinOH]

2. There are way too many malls, anyway. The older malls (20 years or more)

are losing business to the brand-new malls that are only a few minutes away.

[Hawkeye-X]

3. Tis true - one of our oldest mall was just demolished and made way

for a similar village center with Target & McDonald's nearby. Nearest mall was just completely rehauled and is a very popular mall.

(For those in Colorado: Buckingham Square/Aurora Mall (now called Town Centre of Aurora))

Hawkeye-X

[KamaAina]

7. This evolutionary process has been chronicled at Dead Malls

http://www.deadmalls.com

Amazing what people can accomplish with some time on their hands and a broadband connection, isn't it? :shrug:

[Atman]

4. Convert the malls into giant indoor housing complexes.

Divvy up the retail space into apartments. Most malls already have food courts. You'd have an entirely self-contained indoor community. It'd be great for seniors, especially. Walking tracks everywhere, all services right under one roof.

.

[Captiosus]

10. Newmarket Mall/Newmarket Fair in Hampton/NN, VA in the late 90s

Turned the entire upper section of the dead mall into extra classrooms for the local Community College.

Sadly, that only lasted a couple of years before the Community College ditched that idea.

[Robbien]

5. Kohls was just on my TV urging all of us to hurry on in for lowest prices of Xmas season

Geeze, Trick or Treat isn't even over yet. Yup, I'd say malls are hurting.

[Initech]

6. They demolished an air force base in Irvine (CA) to make way for a huge shopping mall.

It could've been converted to a new commercial airport which would've solved our transportation problems for decades to come, but the NIMBYS had to intervene, and this particularly pisses me off because there's a huge shopping mall 10 minutes from it. :grr:

Just shows you the mentality of the county I live in.

[Tierra_y_Libertad]

9. Well, there IS a silver lining to every cloud.

[undeterred]

11. Suddenly "layaway" is back.

I haven't heard that word in years.

[onethatcares]

12. lay a way with fees

depending on the store. I hate malls, debartolo, sembler, and the rest just kept on building one after another, just like walmart. No rhyme or reason, they destroyed green space we could use and replaced it with hot concrete and black top parking lots. Hell, they're still doing it down here, even though there are uncounted numbers of unused spaces already available.