Green Street predicts over 50% of department stores in malls will close by 2021
According to CNBC:
First, the department store closes. Then, the apparel shops try to scoot out of deals. This is a one-two punch that could trigger a wave of malls shutting for good over the next 12 months.
More than 50% of the department stores anchoring America’s malls are going to close permanently by the end of next year, a new report from Green Street Advisors predicts. There are about 1,000 malls still open in the U.S. And roughly 60% of those have department store retailers, such as Macy’s, as anchor tenants, the commercial real estate services firm said.
Dallas-headquartered Penney, which has more than 850 stores, makes up about 19% of mall anchor space, Green Street said. Macy’s is about 18%, while Sears is still 4%. And other department store operators (i.e. Nordstrom, Dillard’s and Lord & Taylor) make up another 20% of America’s mall anchor space, according to the report.
Green Street is predicting that retailers’ rent-paying ability will be impacted for years because of the pandemic.
“The only certainty is that there will be far fewer department stores in the future and malls will need to adapt,” Green Street’s Tibone said.