Over the next 25 years, most shopping malls will be extinct, according to the experts. The world of the American shopping mall, said Kenneth Riggs, president and CEO of Real Estate Research Corp., “has been a Darwinian environment since the 1990s with the advent of big-box retail and the ‘Wal-Marting’ of the world – and it will stay that way.” In other words, expect malls to continue their decline due to the rise in e-commerce, with only those consistently producing very strong revenues still doing business in 25 years.
As the J.C. Penney’s in the U.S. and Sears in Canada and the U.S. continue to lose market share to online retailing, “you’re going to see more dead malls where the anchors go dark and ultimately are worth only the land they’re built on,” said Tom Bohjalian, executive vice president at Cohen & Steers, the first investment company to specialize in listed real estate.
Teardowns may not be the only way to capture value in defunct malls, though, said
Rick Fedrizzi, president, CEO and co-founder of the U.S. Green Building Council. He predicts that with re-purposing, they’ll be a useful resource when our way of life swings back to revolving around more compact communities. “Established places like shopping malls will become like town centers, where people can come together, where their doctors and day care will be, where they can gather after major devastations.”