Cracks Are Showing On The Surface Of Once "Safe" Top Tier Malls
https://www.zerohedge.com/personal-finance/cracks-are-showing-surface-once-safe-top-tier-malls
For a while, it looked as though top tier malls may be able to narrowly avoid the ugly fate that was facing most malls around the country in the wake of the Amazon revolution.
But this holiday season, it looks like that's not going to be the case. Some landlords of the most highly trafficked malls across the country are issuing warnings about slowing income growth as they try to continue to target new ways to get feet in the door, according to the Wall Street Journal.
These higher end malls were among 260 top tier malls in the U.S. that many analysts thought were protected from store closings and bankruptcies. But bankruptcies of large name retailers are starting to create aftershocks, even in these once "protected" malls. And even when malls are fall, revenue can still be falling, as landlords have to cut rent to entice stores to stay.
Average occupancy of top malls is still in the 90% range - for now. Some analysts are concerned about the higher costs landlords face to replace departing tenants. They are also expressing concern about the "sales per square foot" metric that is often touted by landlords in the business. Malls usually only need one very productive tenant - like a Tesla store - to skew this metric higher.
Vince Tibone, an analyst at Green Street Advisors said: “All it tells me is that you added a Tesla into your mall. It tells me nothing about how the mall is doing.”