Department stores still represent about 60% of the anchor space within malls today, according to Green Street Advisors. Green Street is forecasting more than half of the department stores anchoring America’s malls are going to close permanently by the end of next year.
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.
The coronavirus pandemic that has slammed the U.S. economy is speeding up the demise of department stores. As Covid-19 forced the likes of J.C. Penney, Macy’s, Nordstrom and Neiman Marcus to shut shops temporarily, the circumstances became even more dire for these already struggling companies.
“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,” Tibone said.
Mall owners’ finances are also being strained, as a number of tenants including Gap are not paying rent during the pandemic. That could mean some landlords aren’t able to make their own mortgage payments, and end up having to hand the keys to malls back to lenders.
Green Street is predicting that retailers’ rent-paying ability will be impacted for years because of the pandemic.