Mall-aise

http://mobile.nytimes.com/2015/01/04/business/the-economics-and-nostalgia-of-dead-malls.html?smid=fb-nytimes&smtyp=cur&bicmp=AD&biclukp=WT.mc_id&...

Owings Mills Mall (interior)
Owings Mill, Maryland
en.wikipedia.org

Hello Everyone:

After having spent the last few weeks being inundated with enticements for my retail business, blogger thought it would be a good time to look at dead malls.  Dead malls are malls that are losing business and are in danger of being shut down, if the have not been closed already.  In a recent article for the New York Times, "The Economics (and Nostalgia) of Dead Malls," Nelson D. Schwartz looks why once thriving malls, like Owings Mill Mall in Owings Mills, Maryland, die out and what the future holds for the empty buildings.

Owings Mills is set to join a growing number architects, planner,

South Coast Plaza
Costa Mesa, California
Photograph by John Connell
southcoastmetro.com

real estate professional, and internet fan refer to as "dead malls."  Since 2010, over two dozen once gleaming castles of retail have shuttered their doors and an additional sixty are teetering closed to the edge, according to Green Street Advisors, which follows the mall industry. Since the nineties, malls have been placed on the endangered species list, however contemporary reality is more nuanced and reflect broader trends in the reinvention of the American economy.  As the income gap widens, high-end malls continue to do good business. despite former anchor stores such as: Sears, Kmart, and J.C. Penney stumbling, taking down middle- and working-class malls with them.

Empty parking lot at Owings Mill Mall
baltimore.cbslocal.com

According to Green Street senior analyst D.J. Busch, "It is very much a haves and have-nots situation.  Affluent Americans will keep going to Short Hills Mall in New Jersey or other properties aimed at the top 5 or 10 percent of consumers.  But there's been very income growth in the belly of the economy."  This said, anchor Owing Mills anchor stores J.C. Penney and Macy's are holding on but middle tier retailers such a Sears, Lord and Taylor, and regional chain retailer Boscov's have all come and gone.

Owings Mills opened in 1986 and underwent renovation in 1998.  As a dying mall, Owings Mills is quite young and while its location has been a contributor to its demise, other forces played a part, specifically, changing consumer habits and demographics.  "I have no doubt some malls will survive, but major segments of our society have gotten sick of them," says Mark Hinshaw, a Seattle-based architect, urban planner, and writer. Amazingly, online shopping is having a minimal effect.  "Less than 10 percent 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."

Abandoned Hawthorne Plaza
Hawthorne, California
Photography by Chris Cognac
businessinsider.com

At the heart of the problem is an over abundance of stores in many parts of the country.  "We are extremely over-retailed," declared Christopher Zahas, a real estate economist and urban planner from Portland, Oregon.  Further, "Filling a million square feet is a tall order."  Indeed it is.  Like decaying bridges, dead malls attract and repel.  The attraction is so powerful, that there is a website devoted to the carcasses of former bastions of retail naturally called http://www.deadmalls.com.  Dead malls have also become a bit of a cultural meme to the point where the abandoned Hawthorne Plaza in Hawthorne, California was used in a scene in the David Fincher adaptation of Gone Girl.

Eastland Mall Tulsa, Oklahoma
Tom Baddley of Lost Tulsa
via deadmalls.com
treehugger.com

"Everyone has memories from childhood of going to  the mall," says Jack Thomas, one of three partners the  site (presumably deadmalls.com).  "Nobody ever  thinks a mall is going to up and die," he adds.  Cognizant of the cultural implications as well as the  economic stakes, the retail industry is trying to  change the public perceptions of what malls are.  This  past August, the International Council of Shopping  Centers, a New York-base trade group for the shopping center industry, hired the public relations firm Burson-Martseller "to put the real story out there and stop the negativity around idea that the mall isn't going to exist in the next few years," trade group communications director Jesse Tron announced.  While, yes, many thriving malls will continue to do well in years to come, it is unclear what steps the industry can take to prevent more malls from closing their doors.

"Dead" wing of the Summit Shopping Center
Shanghai, China (2007)
en.wikipedia.org

 Approximately "nearly 80 percent of the United  States's 1,200 malls are considered healthy,  with vacancy rates of 10 percent or less."  However, do not be so optimistic, this down from "94 percent in 2006," according to CoStar Group, a main data provider to the real estate industry.  Further, almost "15 percent (presumably of the 80 percent) are 10 to 40 percent vacant, up from 5 percent in 2006.  And 3.4 percent-representing more than 30 million square feet-are more than 40 percent empty," signaling what Mr. Busch of Green Streets morbidly calls "the death spiral.

Industry executive readily admit that mall business has undergone a schism since the recession.  According to Steven Lowy, co-chief of Westfield Corporation, "You see the A-rted malls, the flagship malls, performing very well."  Westfield, a global corporation, has shed properties in the Midwest, focusing on the more prosperous East and West American coasts.  In Europe, Westfield is prefers the wealthy urban centers of London and Milan.  "Our business is more regional and high-end focused...There are gradients of dead or dying or flat, but anything that's caught in the middle of the market is problematic," says Mr. Lowy.

Villa Italia Mall
Denver, Colorado
9news.com

Tom Simmons, who oversees the mid-Atlantic shopping center department of Kimco puts it more bluntly, "There are B and C malls in tertiary markets that are dinosaurs and will likely die...A malls are doing well."  Survival of the retail fittest. However, even among A, B, and C category malls the division lines are not as clear.  Case in point, the White Flint Mall, a former upscale destination in North Bethesda, Maryland, is now shut down, awaiting demolition.  Drive a half hour east to Prince George's County and you will come to the former site of the Landover Mall, razed in 2006, leaving an empty lot and stand-alone Sears, closed in 2014.  Both properties are owned by the Lerner family, also owners of the Washington Nationals baseball team.  Lerner Enterprises has stated that it wants to redevelop the properties but there has been little movement on that endeavor.

Interior court of the Rolling Acres Mall
Akron, Ohio
examiner.com

The former site of the Rolling Acres Mall, in Akron, Ohio, has confounded all attempts to redevelop it and now sits like a Cinderella left behind on the night of the ball.  Retired Akron detective and former mall security adviser Timothy A. Dimhoff recalls, "...people would come from all over in busloads...Everybody in Akron still talks about the caramel popcorn in the food court."

Now Owings Mills stands on the precipice being a dead mall, but not "a dead-end market."  General Growth Properties, the original mall owners, sold a 50 percent share to Kimco in 2011 and at present, the company is working to redevelop it into a combination open-air and enclosed retail establishment.  However, resurrection is not as simple as waving a magic wand.  Demolishing the old mall and building, what the industry calls, a "power center," with big-box stores like Costco and Target would cost $75 to $100 million and take between two to five years.  The preservationist suggests building rehabilitation.  Owings Mills's demise was primarily due to the attraction of the more upscale Towson Center, despite the fact that Owings Mills was originally planned as a luxury property.  Once Saks Fifth Avenue closed its anchor store, the mall found it hard to compete.  Will dead malls live to see another day?  Only the retail deities know