Will Malls survive this?

It would depend on the individual mall, are the generic malls with the big box brands where footfall could migrate online? (most of my friends are now even buying Apple products just online, where the retail experience was previously highly relevant) Or is it a mall that is more specialized and less likely to offer products online? Are the malls geared towards younger people or more mature markets? Male/female? (who will go back first and what for)

A mall like La Encantada in Tucson is very different than a run of the mill Simons in the Inland Empire.

This pandemic is only accelerating the retail apocalypse. Malls are going to become more of a niche experience, catering more exclusively to designers and apparel shops that sport clothing that customers would be more apt to try on before purchasing.

The transitioning of department stores to e-commerce will render malls/shopping centers few and far between. Soon will come the day when our kids ask us what it was like to hangout at the mall as teens.

In their current forms? No, superregional malls will not survive. There simply aren't enough legitimate tenants to fill up a ~1M sf mall these days. The "middle" (the small shop space between the anchors) makes up about half of that number, and is equally oversized.

The question then becomes, what happens to the 300K - 500K sf of space that these malls owners are getting back? As C8 alludes to above, probably not much to the run of the mill malls on so-so dirt. The mall landlords that will be valuable in 10 years are those that can take that excess GLA back, look in the mirror, develop a master plan, redevelop, and reintroduce themselves to the community.

Retail isn't going away, but there just isn't a need for the current levels. Mall owners will become mixed-use campus owners, and investing in them is betting on their ability to execute on that (or partner with people who can).

There's a mall in Houston near the neighborhood I'm from that's always super active but it had gone through major additions in the past several years. Outdoor restaurants and shops, movie theater, etc. I can't see that closing anytime soon. Not sure how common those types of malls are around the country though.

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.

Just came across a Development Associate job posting on LinkedIn for Unibail Rodamco (Westfield).

Not sure wtf they are building at this point...

The town center concept mentioned by CRE looks promising IMHO. At least as it relates to the A+ and A++ malls. Those are located in areas where there’s high foot traffic independent of the mall, high income and pop density, lots of need for good spaces to eat and relax. Build multi family and office, add more dining, and all of this cuts out some store space which then leaves you with only the best stores. Seems at least plausible

My firm has a mall asset and the play is 100% to bring the density to us through developing condos. So many of the tenants at malls, regardless of if they are AAA assets or random suburban ones, have been on percentage rent or even just paying CAM for years.

There is a reason pension funds and Brookfield Property Partners are snapping up the well-located malls. They can have declining traffic every year, it doesn’t change the fact that it’s built on land that has realizable value from development.

Very concerned amidst the Neiman Marcus bankruptcy situation... and the just the general direction of retail in most markets. Many smaller mall tenants have one way termination rights which could lead to a domino effect. If this continues we will run out of big box retailers to fill the large footprints.