The dying shopping mall has become one of the most enduring (and discouraging) icons of the decade. While ripe for social media parodies, this trend has real consequences for property investors who long ago invested millions of dollars into a once-bustling center of commerce. With the rise of Internet shopping and a new generation of consumers, the shopping mall has also become a sort of parable for other industries. Adapt and innovate or die. Consumers won’t wait around while you figure it out.
According to a report published in The Atlantic, just two thirds of the country’s remaining 1,200 malls are enjoying success. That means about 400 malls nationwide are spiraling toward bankruptcy or already dead. Of course, one industry’s loss is another industry’s opportunity. There is still money to be made in America’s shopping malls, even if that revenue isn’t coming from retail sales.
● Dying anchor stores lead the decline – The death of the American mall actually provides an insightful illustration of some important real estate realities in the retail sector. First and foremost, malls saw their decline because department stores were unable to compete with the rise of eCommerce. As a result, department stores began to go out of business. As key anchor stores began to disappear from across the country, remaining tenants were able to pay greatly reduced rental rates. This created scenarios where once thriving malls began to bleed money seemingly overnight.
● Redevelopment is no easy sell – In other sectors of the Texas Commercial Lending industry, updating an obsolete building is much more straightforward. Sell the property off to new ownership, identify a new use for the space and make upgrades as necessary. Making upgrades to a dying shopping mall is not so simple, in large part because malls are typically owned by trusts or groups of investors. They may not all agree on the best next steps for recouping their investment, and this lack of leadership can spell doom for a shopping center that is already in decline. Even worse, finding a redevelopment project that takes an entire shopping mall’s worth of square footage is not a simple task. That’s why so many investors are thinking outside the box when it comes to shopping malls.
● Innovative Texas Commercial Lending offers fresh solutions – Ultimately, the fate of America’s shopping mall will depend on the savvy investors who can come up with new strategies for the empty space. Many times those inspired to rescue a mall are those who have invested in nearby businesses and fear the impact an abandoned mall will have on their foot traffic. Many malls have been purchased by community colleges or purchase for redevelopment into a education or medical campus.
Those with a winning idea for mall redevelopment are in a unique situation. Purchasing a spacious shopping center space has never been easier, so get creative to take advantage of this one-in-a-lifetime opportunity.
Winners and losers in commercial real estate are determined by who thinks ahead the furthest and the fastest. By working with an experienced private lender, your company can be on the cutting edge of this trend.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.