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Retail Apocalypse

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  • #16
    Originally posted by disneysteve View Post

    One mall near us now has several medical offices, a karate studio, a fitness center, and the county offices including the courthouse. Another has a small church, and I think one is using space in a vacant anchor store location for college classes. There are millions of square feet of former retail space across the country getting repurposed. I read about one mall that converted the upper floor to condos.
    Churches and schools in shopping centers are a death knell for other retailers. They bring almost nothing to the table in terms of meaningful foot traffic. That is a sure sign that the shopping center is in steep decline. Churches have traffic about 2 hours a week on Sunday morning when everyone else is closed.

    Our leases require that the landlords lease space to only bona fide retailers, with a maximum vacancy of X%, or we can bail. No Edward Jones, no insurance agencies, tattoo shops, churches, or schools.

    How can you have any pudding if you don't eat your meat?

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    • #17
      Why not Edward Jones or insurance agencies? Not enough foot traffic?
      james.c.hendrickson@gmail.com
      202.468.6043

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      • #18
        Originally posted by TexasHusker View Post

        Churches and schools in shopping centers are a death knell for other retailers. They bring almost nothing to the table in terms of meaningful foot traffic. That is a sure sign that the shopping center is in steep decline. Churches have traffic about 2 hours a week on Sunday morning when everyone else is closed.

        Our leases require that the landlords lease space to only bona fide retailers, with a maximum vacancy of X%, or we can bail. No Edward Jones, no insurance agencies, tattoo shops, churches, or schools.
        The death knell came before the other stuff moved in. That was the whole point. It was those insurance agencies, tattoo shops, churches, and schools that have kept the doors open. If these malls had lease requirements like you mention, they would have been bulldozed by now. There simply aren't retailers out there to fill all of that vacant space. At least turning it into mixed use space allows them to stay in business.

        The reality is that large enclosed malls, with few exceptions, are a dying business model. It's just not how people shop anymore. They either need to repurpose all of that space or knock it all down and start over again. It's kind of sad to see as I grew up in the heyday of mall shopping. That's where my friends and I spent our free time. "What do you want to do today?" "I don't know; let's go to the mall." We'd shop and eat and hit the arcade and kill a few hours. Kids don't do that today. They're home on their phones and tablets watching Netflix and playing games online. And when they need something, they just order it on Amazon.

        The malls around here that have survived have mostly gone upscale, higher end retailers like Coach, Tiffany, Rolex, Tesla, and the like. Throw in some nice upscale restaurants and a theater with leather recliners and reserved seating and you've got a viable business.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

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        • #19
          Originally posted by james.hendrickson View Post
          Why not Edward Jones or insurance agencies? Not enough foot traffic?
          correct.
          How can you have any pudding if you don't eat your meat?

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          • #20
            Our strategy with our own locations is to avoid the "big box" centers - Wal Mart, Best Buy, malls, etc. You are placing your fate squarely in the lap of those big boxes. We are focusing on the "micro" strip centers - three, four, five retailers in a small center. Smoothie bars, tanning salons, boutiques, etc. If one of these businesses goes out of business, 1800 square feet is usually an attractive size for other businesses. Of course they like us because we deliver a lot of traffic ourselves. Consumers love the mico-retail centers. They are easy-in, easy-out, and usually front a busy street so we have great visibility.
            How can you have any pudding if you don't eat your meat?

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            • #21
              Originally posted by TexasHusker View Post
              Our strategy with our own locations is to avoid the "big box" centers - Wal Mart, Best Buy, malls, etc. You are placing your fate squarely in the lap of those big boxes. We are focusing on the "micro" strip centers - three, four, five retailers in a small center. Smoothie bars, tanning salons, boutiques, etc. If one of these businesses goes out of business, 1800 square feet is usually an attractive size for other businesses. Of course they like us because we deliver a lot of traffic ourselves. Consumers love the mico-retail centers. They are easy-in, easy-out, and usually front a busy street so we have great visibility.
              Oh, I agree completely. That's not what I was referring to at all. I was talking about traditional enclosed shopping malls.

              Yes, open strip centers are the way to go today. Customers want convenience. They don't want to have to search for a parking space, walk half a mile, find the store they want, and spend an hour in the process. They want to zip in or their way home from work, get what they want, and be on their way. The newer "malls" that have opened in this part of the world are all open air with ample parking close to every store. Even the ones that still have 30 or 50 or more stores are built that way now as it better fits how people shop.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment

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