Shopping Malls May Not Go Extinct After All, Shopping Mall Execs Say

The end may not be as close as we think for the shopping mall world.

It’s a hard reality to imagine, as nearly every large department store in the country — from J.C. Penney’s to Macy’s and Nordstrom — continue to report both a decline in sales and several store closings. Still, industry executives attending the upcoming International Council of Shopping Centers convention are determined to present their facts and change public perception.

While retail property owners are re-leasing locations, nationwide vacancies in the U.S. remained at 4.9 percent, which is likely giving hope to the brick-and-mortar side of the industry. With all of the store closures and bankruptcy filings, optimism about the future of physical retail locations may be difficult to drum up. However, many retail landlords are looking for ways to integrate online experiences in-store to provide unique experiences that can’t be found on the internet.

Given these efforts, it may be some time before malls see a potential turnaround. Real estate investment trusts that operate malls are down 13 percent, which is causing major concern by investors. Property research company Green Street Advisors LLC’s President of Advisory, Jim Sullivan, commented on this issue in particular to Bloomberg News.

“The clouds over bricks-and-mortar retail have been darkening throughout ’17. A key question for stock market investors is whether those fears are overly discounted in today’s share prices, particularly for retailers that are weathering the storm — as well as for the REITs that own high-quality malls and shopping centers,” Sullivan said.