1) “Report: 1 in 4 Malls to Shutter by 2022” [Sourcing Journal]. “Though the commercial real estate industry has been putting a sunny face on its collective preparedness—anchors are becoming gyms! Storefronts are transforming into restaurants—its hard to imagine how all of this space will be repurposed in just 5 years. That said, some have been using the rash of closures and bankruptcies to oust low paying tenants in favor of businesses from which they can demand more…. And some property owners have more of a challenge than others. The credit agency highlights Simon Property Group and General Growth Properties as two of the once that have long since exited vulnerable B and C properties. Today each enjoy at least 96 percent occupancy. With 11 and 12 percent respective occupancy rates in weak malls, Macy’s and JC Penney have the most exposure, Credit Suisse noted.”
2) “Major Wall Street Firm Expects 25% of U.S. Malls to Close by 2022” [Fortune]. “That translates to some 275 shopping centers in the next five years… the expected rash of closings is much more likely to hit low end malls than high end ones, or at least those that are well maintained. There is no doubt there is too much retail space in the U.S. and that a contraction has long been coming: there are 2,353 square feet of space of shopping centers in the U.S. for every 100 Americans, compared with 1,636 in Canada and 458 in Britain, according to recent data from CoStar Realty Information.” Seems like our mall space is just as out of line as our health care system. WTF?
3) “[Radio Shack] shuttered more than 1,000 stores over the Memorial Day weekend, leaving the Fort Worth, Texas-based chain with just 70 company-owned stores” [247 Wall Street]. “Following the announcement over Memorial Day weekend, there will be 425 stores owned by franchisees and 500 dealer-owned stores. Most of the remaining company-owned locations of the 96-year-old electronics retailer are located in a handful of states, and three states have the lion’s share of them. New York has the most company-owned stores of any state, 22, followed by Pennsylvania with 18 and Texas with 13.” Radic Shack, bust. Shake Shack, boom. Why?