Will Malls survive this?
They were in trouble prior to COVID. Is this the final straw? Stores closing down across the country and with many big box retailers closing shop to liquidate will likely not enter any new leases.
Do they survive?
I agree with @C8" and CREthoughts
Underperforming or low-end malls are going to suffer irreparably, as they have been for some time now. This crisis will only accelerate this - not create a situation that didn't already exist. High end malls will also suffer as all retail will, but their location, store selection, and/or shopper demographics will bring them back post-crisis.
Dying malls across the country have already become centers for reinvention. Some reinvention is easy - repurposing what used to be retail space to C and B class office or even warehouse space. I know tons of churches who are now in what used to be retail too. Other reinvention is more incredible - either tearing down the mall entirely to take advantage of the massive acreage that is already graded and has utility access or doing wild things like taking the top off the building to create an open air market where a dated 80's and 90's era indoor mall once stood.
One of the things I have developed are "Town Centers" - the new urbanist equivalent of a mall for the 2010s and 2020s. 30-40 years from now, many Town Centers across the country will also be dying because some developers didn't put the effort in to make them lasting parts of the community. The well designed and developed Town Centers will remain, but the low effort cookie cutter Town Centers, or Town Centers located in areas with shifting demographics, will fail. That too will lead to opportunity.
I don't think that retail is "dead" but rather is much different than it was even 10 years ago. The most successful malls that I've seen as of late have shifted focus away from selling clothes and merchandise and have transitioned into "experience-centric" places. These places are filled with "Amazon-proof" tenants with a larger focus on "local" goods. Agglomerating a ton of local restaurant favorites, putting in a grocery store and shifting a portion of it into mixed-use whereby creating "Town Centers" (see @CRE's comment) have helped centers thrive. ("" are keywords to use in your future GGP interviews)
The reasoning? People still want a place to visit on a rainy day or have a good relaxing day in the sun during the summer. Teens still need a place to hang out. I don't remember the last time that I thought "need a blender, must go to Sears". However, there are times when I want to eat Mediterranean and my girlfriend wants to eat Pho and our regional mall food court has both (successful local chains). Also from a multifamily standpoint, how convenient would it be to live above a grocery store and 40 different restaurant options? Another way to think about it is to think about experience-driven retail is to think Las Vegas. In essence, Las Vegas is a large agglomeration of experiential retail which is conglomerated with the hospitality industry. People travel to Vegas to indulge in good food, drink, gambling and parties. If it wasn't for the retail component, Vegas would just be Palm Springs.
All malls are not created equal. I'd hate to be a core fund that owns a one-off mall with secured debt, or a shitco REIT that owns malls in a tertiary city, but good malls in good locations with good operators are not going to die. If you're pointing to retail bankruptcies from the past 6 weeks (J Crew, Neiman, penny, etc) those are dated companies that had too much debt and likely would've gone under a while ago if the last decade wasn't the most accommodating capital markets environment in recent history. Extrapolating their failures out to the death of retail or even the death of the mall is lazy and inaccurate.
Is this crisis going to usher in a new era in society where social interaction and face-to-face contact are things of the past? If you really believe that, then sure, short malls and retail is dead. If you think that human nature will remain intact, community gathering spaces are going to continue to exist (and many malls and shopping centers serve that purpose across our country).
This will likely act as a catalyst where some of the weaker retailers are purged, allowing well capitalized operators to redevelop those spaces into better uses.