Here’s Why Vacant Stores, Zombie Malls Are Much Bigger than Mall Vacancy Rates Indicate

Zombie malls and shuttered stores don’t count.

Another regional long-established department-store chain bites the dust. One in an endless series. The 16 Magic Mart stores in West Virginia, Virginia, and Kentucky, plus a distribution center and the company’s headquarters will be closed and liquidated, according to Ammar’s, Inc., a family-owned company that owns the stores and started with its first store 97 years ago.

In a letter to employees, the company blamed “continued inadequate sales leading to substantial financial losses,” and “difficult economic conditions that continue to persist in the markets we operate.” All locations will be closed “sometime around November 1.”

And then those stores, many of them located in less than booming environments, will become vacant.

Department stores have been hardest hit by online retail. Among them, regional chains have been hardest hit. Bon-Ton Stores – which operates department stores in 23 states under the brands of Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers – is now in the process of being liquidated. 24,000 employees are losing their jobs. Numerous smaller chains have shut their doors. Among the national chains, store closures have been widespread: Macy’s, Sears, Kmart, J.C. Penney, etc. have closed thousands of large stores over the past few years. Smaller stores and specialty stores are shutting down across the country. And these stores become vacant.

Landlords have to find other tenants in this environment, or find another purpose, such as redeveloping them for use by chain restaurants, or bulldozing them and building office buildings or apartment buildings or whatever on the land.

Bon-Ton combined with Toys ‘R’ Us – which closed its remaining stores on Friday – occupied nearly 60 million square feet of retail space. Every square inch is now being vacated.

And there’s some handwringing about the so-called “vacancy rate” in the retail sector – a deceptively low measure for reasons that we’ll get to in a moment.

The retail vacancy rate rose to 8.6% in Q2, the highest since 2012, according to data from real-estate research firm Reis Inc., cited by MarketWatch. By comparison, the peak since the Financial Crisis was 9.4% in Q3 2011:

The impact is especially severe among strip malls and other neighborhood and community shopping centers, which suffered their worst quarter in nine years. About 3.8 million square feet of space was emptied from April to June, pushing the vacancy rate for this type of mall up to 10.2%, Reis said.

Note the magnitude: 3.8 million square feet were “emptied out.” This is tiny compared to the 60 million square feet emptied out by just Bon-Ton and Toys ‘R’ Us.

This is why the “vacancy” data, as unappetizing as they may be, aren’t in a steep swoon, though you’d expect them to be, given the rampant store closures.

But these numbers are deceptive – because something counts as “vacant” only when the landlord tries to fill it with another retailer.

Stores that emptied out and became zombie stores in zombie malls, or the Toys ‘R’ Us stores in bad areas with zero hopes of finding another retail tenant, etc. – they’re not being counted as “vacant” retail space because they’re no longer being marketed as retail space, and the square footage of that retail space disappears from the vacant retail space stats.

That space may remain shuttered and vacant for years, with a fence around that is catching tumbleweeds, as lenders tussle over who gets what, if anything, until the land can hopefully be sold to a developer who might bulldoze the walls and build an apartment complex on it.

For example, data provided by Transwestern, a national commercial real estate firm, showed that in 2017, total vacant retail space was 513 million square feet. And despite all the store closings, bankruptcies, and liquidations, the “vacant” space was down from any of the prior three years, and in total fell by 18.5% from 2014!

In other words, in the thick of the brick-and-mortar meltdown, so-called “vacant” retail space declines!

Transwestern divides this into two sectors: malls and shopping centers:

In malls alone, the epicenter of the brick-and-mortar meltdown, “vacant” space dropped 6.6% from 36.6 million square feet in 2014 to 34.2 million square feet in 2017! Ha, compare this to the 60 million square feet that Bon-Ton and Toys are vacating! And add to that the thousands of stores that Sears, Kmart, Macy’s, J.C. Penney’s, etc. have vacated. But not many of them show up in the “vacant” space stats though many remain vacant.

In shopping centers, which include strip malls, vacant space plunged 16% from 323.6 million in 2014 to just 272.4 million square feet in 2017. Ah yes, the boom in brick-and-mortar!

These types of figures are cited by industry soothsayers as examples of why the brick-and-mortar retail meltdown isn’t happening, and why the thousands of chain stores being closed every year aren’t having any impact on mall landlords – though mall landlords are scrambling to deal with the meltdown.

By removing vacant retail properties from the retail “vacancy” data because they’re no longer being marketed to potential retail tenants is one of the ways in which often cited and not very dismal vacancy rates produce a falsely soothing effect on our otherwise rattled nerves.

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  120 comments for “Here’s Why Vacant Stores, Zombie Malls Are Much Bigger than Mall Vacancy Rates Indicate

  1. TheDona
    Jul 3, 2018 at 4:41 pm

    “We don’t need no (real) stinkin numbers,” says Transwestern who uses PwC to assist with their made up assessment.

    • Spanky Bernanke
      Jul 4, 2018 at 7:37 pm

      PwC! LMMFAO!! Those guys are always in the thick of the B$! If ya ever wanna create a shell company… Let me just say that here in east Cali, we just lost the BIGGEST retail space occupier in many years. Any guesses?? It’s BoA. What does THAT tell ya about the “economic recovery”? It’s total horse hooey. You do NOT need statistics to observe that the small business retail and service sector is in an all out free fall. However, the local city Chamber of Commerce refuses to admit there is a problem. Just keep making up B$ until the turn around comes. That my friends, for you that don’t have a biz admin degree, is called “behavioral economics.”

      • MASTER OF UNIVERSE
        Jul 4, 2018 at 10:26 pm

        Austin Fitts has stated that the Oligarchs own the journalists so the reporting of the Great Financial Crisis is muted via MSM and the name-of-the-game is to not report on the failures that are actually imploding the economy. The fundamentals are skewed along with the false metrics.

        Nomi Prins is equally suspicious of the lack of reporting on the imploding stats.

        MOU

  2. Gershon
    Jul 3, 2018 at 5:03 pm

    But…but…that earnest young “analyst” with the bowtie on CNBC assured me that our economic recovery is roaring along, and that I should buy more stocks!

    • Escher
      Jul 3, 2018 at 10:55 pm

      Buy Amazon stock.

      • 728huey
        Jul 4, 2018 at 12:19 pm

        Disclosure: I own Amazon I stock and have had it since 2000, so while I should be jumping up and down on how phenomenal my returns have been since then, I unfortunately don’t own enough stock to retire. I have just under 50 shares, so it’s worth about $80,00 right now. I have been thinking about selling my shares, though, as I have a feeling the market will probably crash sometime this fall, so I want to lock up my profits. While I don’t believe Amazon is in any danger of going out of business this fall, it will probably get hammered by overall sentiment and probably drop below $1,000 a share when the proverbial organic solid waste matter hits the rotating air circulation device.

        • Wisil
          Jul 4, 2018 at 3:19 pm

          Sell enogh to cover your initial purchase, and then the rest is house money.

        • Jul 10, 2018 at 6:37 am

          Sell before Labor Day. Traders come back from their Aug vacations in foul moods.

      • blindfaith
        Jul 4, 2018 at 12:37 pm

        Humm, since the profit from on line sales is ZERO, and all net income comes from government cloud services, one would think it is a sure bet, as long as the government does go “out of business”.

        Does seem odd to me, here on the 4th of July, that the government is…. indirectly….. helping to destroy the retail industry, the long standing backbone of American commerce and employment, as well as a tax generator. Isn’t as if the ‘government’ leaders don’t know this, not with new CIA and NSA contracts for more AWS services just awarded (without competitive bidding) to Amazon. Doesn’t hurt to own the Washington Post either.

        So who are the mall owners? Doctors, lawyers, Indian chiefs, hedge funds, pensions, etc., some needing a write off and others trusting their ‘advisers’ for to long. Winners and losers seem to be picked these days rather than ‘evolution’ driving history.

      • Sarcastic Fringehead
        Jul 5, 2018 at 10:29 pm

        Also, the rent’s still Too D*** High.

    • Frederick
      Jul 4, 2018 at 12:20 am

      Before it was buy Bear Stearns Today it’s Deutshebank Same bunch of Gypsie parasites pushing their poison though Got GOLD?

      • fajensen
        Jul 4, 2018 at 10:51 pm

        I’ll buy DB at about 1 EUR a share. It will get there, no worry!

  3. Boston Bound
    Jul 3, 2018 at 5:14 pm

    See mostly vacancies left many of the larger retailers that have gone down in the NYC tri-state area over the last three years. 70-80% are still vacant, and those that have new tenants are usually furniture or home improvement (flooring, etc. or housewares) .

    Yet there are numerous mini-plazas being continuously built that fill up instantly with Starbucks, Walgreens and most commonly small restaurants.

    It appears the restaurant business is very lucrative (or it attracts kamikaze investors?).

    • MITCH
      Jul 3, 2018 at 8:53 pm

      Out here in Honolulu a vacant space can sit for YEARS. The reason is that there are only a few commercial landlords and they would rather sit and take a paper loss than budge an inch on rents. They also drive successful businesses out of business with exorbitant rent increases when leases expire. There is practically no sense in renting a space for a business in Honolulu. Almost all new businesses are chains or young people trying to make it in the restaurant game. The business is there but the landlords wont let them make a living, THEY WANT ALL THE PROFIT !!! The name of the game in Hawaii is MONOPOLY, especially in commercial real estate holdings.

      • Michael Fiorillo
        Jul 4, 2018 at 10:42 am

        There’s a reason we still use the feudal term land LORDS…

      • Juanfo
        Jul 4, 2018 at 2:14 pm

        Down here established business dropping like flies, the commercial infrastructure remains vacant for years. Some locations never re-occupied going on a decade after TGFC.

        • alex in san jose AKA digital Detroit
          Jul 4, 2018 at 6:29 pm

          The number of empty spaces – in malls and otherwise – is mind-boggling here. And more commercial and retail space is being built! Tons more residential too.

          We’ve got nice weather and we’ve got water, but this is all bubble upon bubble. Most of the businesses around here are supplying things like flooring, carpet, cabinets, things for the McMansions. Ostensibly there are tech workers around here too, writing new fart apps or something that pays well but what if fart apps go out of fashion? Remember ringtones in the 90s?

          And if tech’s such a bright spot, how come, other than my boss, I know zero people in tech? And I met my boss through electronics surplus swap meets. All I know are surplus scroungers, and I’ve met the odd person messing around with micro-controllers like the Arduino or Raspberry Pi, but on a hobbyist level – in their straight jobs they’re not in tech.

    • fajensen
      Jul 4, 2018 at 11:19 pm

      Maybe restaurants are good conduits for money laundering?

      Restaurants being a business where it is hard to measure actual “inputs” and “output” and where business fluctuate too. In a similar vein, there are a lot of Chinese (staffed by Chinese) 15-station nail-shops popping up in Lund, Sweden.

      I very much doubt that there is such a booming market for artificial nails that a city like Lund, even though it is a wealthy place with about 20000 people living in it, can support dozens of “nail service people” all from China. There has to be something else behind this. There is also far more hair salons in Lund than would appear reasonable. It’s like every 5’th shops in Lund is either a nail salon or a hair salon.

      OTOH – Restaurants are an attractive business in the sense that one can make a lot of money quite fast from a very simple concept. One can put up a novel “gourmet burger” stall at some of the festivals and get maybe 200000 EUR on a 20000 EUR investment for 30 days of really hard work. It is not sustainable in that restaurants that stick around eventually gets either “worn out” due to the work load or they settle on some stable, not extremely lucrative, plateau.

      I know someone in the catering business who only works 1/3 of the year. She does catering for Roskilde Festival and Weddings. Then she blows the money on traveling. Her attitude is: “Why work yourself to death to pay top-rate taxes when you can party instead”?

  4. saylor
    Jul 3, 2018 at 5:15 pm

    Senior house, (ideal with the indoor atriums and secured access for memory loss clients)
    Homeless shelters
    Rec centers…,

    • Steve
      Jul 3, 2018 at 8:25 pm

      An excellent idea. I hope this gets picked up by the decision makers and/or investors or government agencies. Thanks for a great idea saylor.

    • JohnnySacks
      Jul 5, 2018 at 7:40 am

      Very difficult to re-fit a retail store for anything else. Typically the plumbing comes into a single point – where the break room and bathrooms are located. The ceilings are way too high to be practical for housing. Although one could probably find a way to pack them full of mobile homes – stack ’em on top of each other mezzanine style and run a network of exposed plumbing, electrical conduit, and fiber optic. Straight out of a William Gibson novel. Leave the fire sprinklers to soak it all down when the meth labs go up in smoke.

      • Lots
        Jul 5, 2018 at 4:08 pm

        Not so sure how the housing would work. Here’s how NOT to do it though.

        That guy in LA – it was called “ghost ship warehouse” and it caught fire – he’s serving a 10 or 15 year incarceration otherwise known as a “mort-gage”.

  5. Old Farmer
    Jul 3, 2018 at 5:18 pm

    In a small town nearby where I do some shopping there is quite a bit of vacant retail space. At the same time, there is a fair amount of new construction underway of exactly the same kind of space (single story strip mall). Shouldn’t the planning commission be regulating this? It seems very wasteful of resources.

    • PressGaneyMustDie
      Jul 5, 2018 at 3:49 am

      Wolf has run stories before which describe how overbuilt in commercial real estate the US is compared to other countries. I think the 1031 Exchange provision drives a lot of this commercial real estate distortion.

      • Nala
        Jul 5, 2018 at 12:20 pm

        I agree, the IRC 1031 rule promotes investor “tax” decisions vs “real estate” decisions. I have seen investors make terrible investments under 1031 and in the end have lost millions to avoid capital gains and depreciation recapture payable to uncle Sam…

  6. Petunia
    Jul 3, 2018 at 5:35 pm

    I recently watched some videos about the shopping malls in Dubai. They are expanding with all the brands you can think of and attractions too. The tourists flocking there seem to be enjoying themselves and spending too. The biggest difference I could see immediately was how relaxed the people there looked. The security of a low crime environment makes a big difference in how much time and money you want to spend in a mall.

    • RM
      Jul 3, 2018 at 7:43 pm

      I stopped going to malls, movie theaters and McDonalds because I didn’t feel safe anymore at those places.

      • Suzie Alcatrez
        Jul 3, 2018 at 10:07 pm

        Yeah, MS-13 just took over my local mall.

        • BlueinTX
          Jul 3, 2018 at 11:03 pm

          Do you have an article on that? I would love to know more about MS-13 taking over a mall. Why a mall? Would that not expose them to law enforcement as sitting ducks?
          Thanks for the info in advance.

        • Mike G
          Jul 4, 2018 at 12:49 am

          Needs tags

        • blindfaith
          Jul 4, 2018 at 12:45 pm

          Google it folks…it is not fake news as CNN claims.

          Here take Jeffy Besos WPO:
          https://www.washingtonpost.com/local/people-here-live-in-fear-ms-13-menaces-a-community-seven-miles-from-the-white-house/2017/12/20/6cebf318-d956-11e7-b859-fb0995360725_story.html

          125,000 in Chicago…outnumber the police 10 to 1.
          Nothing to see folks, go back to cable news.

        • BlueinTX
          Jul 4, 2018 at 3:11 pm

          Thanks blindfaith, you learn something new everyday!

        • BlueinTX
          Jul 4, 2018 at 3:25 pm

          Addendum: The article blindfaith linked to below is horrific and an eye opener. It shows how another new gang has taken over immigrant neighborhoods, very much as local gangs have taken over poor/marginal neighborhoods before.
          However, this article does not answer my previous question of MS-13 taking over a mall. And why?
          The article, though informative and terrifying, is nothing new, just a “new” gang running an old protection racket and drug network.

        • alex in san jose AKA digital Detroit
          Jul 4, 2018 at 6:33 pm

          Blindfaith – FIRST: If you’re going to cite an article, understand that most of us don’t have subscriptions so all we get is a blank screen with a message extorting us to buy a subscriptions.

          SECOND: Said page tends to lock up the browser, no doubt while it’s busy installing bugs/worms/spyware. Wolf should ban posts like this.

          IF: You are going to cite a source, cut-and-paste the text or at least excerpts that support your argument.

        • Jul 5, 2018 at 12:45 am

          alex,

          Wapo only works if you “unblock” ads. So if you use Firefox which blocks most ads by default, you will get an “unblock ads” message from WaPo. Unless you’re still using Windows Explorer (which is dead and buried), WaPo shouldn’t lock up your browser. And you can read it in Chrome just fine. And you don’t have to pay to read the article.

        • alex in san jose AKA digital Detroit
          Jul 5, 2018 at 2:04 am

          Wolf – it jams my Firefox up just fine, and I have to shut that window and open a new one. Absolutely horrible.

          It’s just better to cut’n’paste at least a relevant paragraph or two, because after wrestling with whatever awful news site it is, it’s like as not the viewer will say “fudge this” and not come back to Wolfstreet.

      • Cal
        Jul 4, 2018 at 3:26 pm

        Our largest and most low class local mall, Northgate, in San Rafael, has been polluted by wanna be and actual gangbangers for years. They keep trying to ‘reinvent’ the mall with an expensive facelift paid for by higher rents. The caliber of businesses that they attract is inimical to this; cheap Chinese corporate crap vendors like Kohl’s etc, McDonald’s, a movie theater that shows ghetto crap movies and junk food purveyors, plus stores selling expensive clothing to teenage girls.
        Basic message; “If you are over 40, we don’t want you.”
        Oh, and “Christmas doesn’t exist here either.”

        Monitors with advertisements playing loudly everywhere. Jesh, what a depressing place.

        • Mary
          Jul 4, 2018 at 7:11 pm

          So, a mall patronized by black teenagers, stores with inexpensive merchandise and movie theatres that show films with black characters. In your head it becomes a locus of evil, populated by “wanna be gangbangers, selling “Chinese corporate crap”. And not enough holiday decorations come Nov/Dec so it’s killing Christmas?

          The racist fear and rage is mind bending. How much Fox News are you watching every day?

        • RagnarD
          Jul 5, 2018 at 8:40 am

          Here’s betting Mary never goes near such places.

        • Frederick
          Jul 6, 2018 at 1:27 am

          Mary Are you a left coaster by chance? Or perhaps upper West Sider

    • Nicko2
      Jul 4, 2018 at 5:00 am

      Dubai is a rich person’s paradise. 80% of the population are expats, the menial/retail workers are majority from South Asian countries like Philippines. Retail/restaurant workers are compensated about $1000 per month (which may include living quarters), menial laborers who build those tall towers are paid around $200 a month (mostly from Pakistan, Bangladesh, India ect…).

      Dubai is an offshore low tax safe haven, so if you’re a millionaire you can live it up, although cost of living is rising all the time (especially with the introduction of 5% VAT). But of course….the authorities have a no-questions asked policy on origin of wealth. That said, the city-state is run essentially as a police-state…hence the safety aspect.

      Although I should note, the place is crawling with spies from every major power. A nice place to spend the weekend, not sure if I’d want to live there full time. ;)

      • wkevinw
        Jul 4, 2018 at 7:39 am

        Exactly right on Dubai. That’s what I have seen when being there, and talking to folks who spend significant time there.

        The wealth/funding for the place 1. “no question asked” 2. has been and will be propped by oil wealth of other emerates if and when the going gets tough.

      • Auld Kodjer
        Jul 5, 2018 at 1:27 am

        Dubai? Isn’t that the place built under a huge opaque dome … under which wealthy oilmen fly in for a few days of drinking like college freshmen and shagging Russian hookers … and through which Allah can not see?

    • JB
      Jul 4, 2018 at 12:27 pm

      legacy malls are out -the MEGA MALL’s are in. the largest mall in the world will be constructed in MIAMI. https://www.miamiherald.com/news/local/community/miami-dade/article86722232.html

  7. Rates
    Jul 3, 2018 at 5:44 pm

    Don’t give up on malls yet Wolf. Our local Stonestown mall seems to be going through a renaissance. Ever since Blaze Pizza opened a store there, visitor numbers seem to be recovering. There’s even a Ramen store from Japan thinking about opening a store there.

    • Jul 3, 2018 at 11:22 pm

      Chain restaurants are the new department store. But there are already 7,000 restaurants in SF. How many more can the market digest, so to speak?

      Also, malls that are in busy areas, such as Stonestown, can always be repurposed or redeveloped. The Macy’s eight-story men’s store near Union Square had no problem finding a buyer (Morgan Stanley), 264,000 sq.ft for $250 million. These are hot areas.

      Macy’s also has the women’s store across the street. I’m not sure what the plans are. Last I heard it might move the women’s store temporarily into the men’s store, reconfigure and update the women’s store, then move the women’s stuff back. And then a non-retail operation is likely to move into the old men’s store building.

      The old Art Deco Sears building in downtown Oakland was totally redone and repurposed into cool offices for millennials, and Uber bought it. Then when Uber began to pull in its horns late last year, it sold it again.

      There is always use for good locations. But they’re no longer retail locations!

      • Enquiring Mind
        Jul 4, 2018 at 10:35 am

        Restaurants in our area of SoCal have been in panic mode for a while, what with couponing up a storm, special promotions, breathless text and email notices and what-not. When the Mind family has an opportunity do dine out, the motto is “Why Pay Retail?”. The outlets don’t really make it very difficult to find bargains, and I am old enough to think that the discounted prices are more indicative of value anyway.

      • Anon2017
        Jul 4, 2018 at 2:03 pm

        The one thing SF, indeed most of the Bay Area is short of, is housing at something approaching reasonable prices. In my suburb, a restaurant and some marginal office space (1 story) was torn down and is being replaced by upscale condos. They will be a short walk from the BART (commuter train) station and should do well.

      • Cal
        Jul 4, 2018 at 3:43 pm

        Besides retail, let’s also think about all the second story apartments that have been converted into business locations; Beauty parlors, hair salons, offices, etc. They are everywhere in S.F., Marin and Alameda County.

        The amount of housing that has thus been removed from the market by such changes in use is large.

        Thought experiment; How much housing, with lowered rents, would come onto the market if every illegal in California were deported and did not return? What would happen to average hourly wage levels?

    • Frederick
      Jul 4, 2018 at 12:24 am

      Don’t worry When the SHTF all those novelty food joints will be long gone Count on it

  8. Olivier
    Jul 3, 2018 at 5:57 pm

    Kind of like people who stopped looking for a job are no longer counted as unemployed, eh?

    This economy is all smokes and mirrors.

    • Daniel J Bjorndahl
      Jul 4, 2018 at 12:02 am

      Yes, what’s the labor force participation rate of land?

    • JD
      Jul 4, 2018 at 8:18 am

      The ‘service based economic’ model seems to be failing …. what a surprise! NOT

  9. raxadian
    Jul 3, 2018 at 6:30 pm

    Zombie malls, Zombie Shopping Centers and abandoned gas stations are a huge problem.

    It takes a lot of money to comvert thrm into something else, more so for gas stations that can barely used as storage space and car washes due to laws about chemical pollution.

    At least you can then use those abandoned places for your next wasteland, bad future or zombie movie…

    • ambrit
      Jul 4, 2018 at 9:25 am

      Use “Zombie Workers” for your extras on these ‘Zombie Movie’ projects.
      As for gas stations, the underground fuel storage tanks, often giant things, eventually hve to be dug up and disposed of. Gasoline is a very toxic substance. There’s a ‘backhoe ready’ class of infrastructure projects for the NeoCCC!

      • raxadian
        Jul 4, 2018 at 11:56 am

        You mean filled with sand, cover the holes with cement and pretend they aren’t there anymore, right?

        Because that’s what they actually end doing in a lot of places unless forced otherwise.

      • Mean Chicken
        Jul 4, 2018 at 8:10 pm

        I’m almost certain of reading a Lawrence Livermore study indicating excavation of gas station tanks for remediation is both unnecessary and unjustifiable.

        • alex in san jose AKA digital Detroit
          Jul 5, 2018 at 2:10 am

          The old building that we moved out of has “sampling wells” both in the street out front, in the driveway, and inside(!) the building.

          When we moved in, we had people coming around doing samples, and had an air compressor pumping air into one of the wells, to “bubble” out the aromatic compounds or something.

          After X amount of time the pump was taken out, and the samples were further apart in time.

          Finally the guys came around to take one last set of samples and explained to me that after X amount of effort had been put in, and X amount of time, the official stance is something like, “Well, we did our best; let sleeping wells lie”.

          Obviously they’d not do this for a really serious amount of pollution, but even for a gas station I can see them just paving it all over and calling it done.

        • Frederick
          Jul 6, 2018 at 1:31 am

          My well water in bucolic Sag Harbor NY was contaminated by some gasoline additive from leaky tanks at a gas station half a mile away We sure are doing a great job of destroying the planet

    • Jason Boxman
      Jul 4, 2018 at 10:35 am

      True story. There’s a former gas station in Ocoee, FL that was abandoned probably before I was born. At the time, there was nothing in the entire area except a derelict hotel. Now, 30 years later, that area is huge and entirely built out. The gas station still sits derelict, abandoned, at what is now a huge 6 lane intersection. It must really be expensive to deal with a site likely contaminated with gasoline.

      • BlueinTX
        Jul 4, 2018 at 3:41 pm

        Lead contamination. The same goes for asbestos, you own it for the rest of your life.
        When, for example you renovate a building here in Dallas, any asbestos or lead found on property, it is your responsibility and cost to dispose of it.
        The costs for a small residential property (say 1000sf) can be in the 10s of thousands of dollars.
        You are also liable for damages, if after remediation the new property owners discover residual asbestos/lead contamination. Think of the lawsuits, rightfully too!

        • BlueinTX
          Jul 4, 2018 at 3:49 pm

          P.S. South Dallas at one time was infamous for its lead smelter. The area around it was and remains inhabited by predominantly black families, and now the occasional Hispanic family that got suckered into buying homes there!
          I don’t know if they signed waivers acknowledging the risks or were simply ignorant.
          My suspicion is that they were ignorant and signed away their legal rights.

        • BlueinTX
          Jul 4, 2018 at 3:52 pm

          Clarification: The smelters were located in West Dallas, but a lot of South Dallas was polluted along with the western area. South and West Dallas is were the poor ghettos are. Areas around Congo street are eye opening. The name gives away you was sequestered there!

  10. TropicalSunset
    Jul 3, 2018 at 6:50 pm

    I’m waiting for the day bank branches start closing down too putting more commercial RE on the market. It has to be expensive to operate those brick and mortar Wells Fargo and BofA locations when they have to compete with many Internet only banks.’

    I wonder WHEN or IF all this retail space available starts to trickle down to affect prices on other forms of commercial RE? Office, apartments, industrial, self storage, hotels, etc…. All of those commercial RE asset types have been doing extremely well for 7-8 yrs, accept for maybe office, which has been luke warm depending on location.

    • c smith
      Jul 3, 2018 at 8:55 pm

      Bankers will be slow to close physical branches because of the quasi-public nature of banks. It will happen; I would estimate that more than half the retail branches existing today will close within the next 10 to 12 years. It should happen faster, as millennials do their banking on the phones, but it won’t because it is politically difficult.

      • Mike G
        Jul 4, 2018 at 12:55 am

        Most of my banking is over the internet or through the ATM at my local bank. I’ve been inside the branch maybe a couple of times in the last five years; I’d be fine if it were just an ATM there.

        Frankly, the customer service experience at most retail and banks sucks because of cost-cutting, corporate over-scripting and upselling.

        • HowNow
          Jul 4, 2018 at 5:37 am

          “Did you find everything you need?” Over-scripting. Good word for it.

      • raxadian
        Jul 4, 2018 at 9:09 am

        Once everything goes digital, bank branches will be small offices with one or two ATMs, one or two clerks and a guard, and little else. The big buildings will be a think of the past.

    • Frederick
      Jul 4, 2018 at 12:26 am

      Who needs bank branches when they eliminate cash and we are all forced to use some sort of virtual currency anyway?

    • Jul 4, 2018 at 6:10 pm

      Not that we need all the branches existing now, but banks can provide authentication (medallion guarantee etc.) and [somewhat] safe deposit boxes. I haven’t figured out how to do those over the net.

      • Frederick
        Jul 6, 2018 at 1:33 am

        If you put anything of value into a banks safe deposit box you are asking to lose it anyway when the govt agents come a callin

  11. Vexser
    Jul 3, 2018 at 7:08 pm

    Can’t the real utilization (and thus un-utilization) numbers be gotten via roundabout methods? Surely the IRS has info about employees and the addresses of their employers. That data could be used to make (industry specific) guesstimations about square footage per employee. Another would be to correlate water usage by area, thus giving some idea of people density in a given area. Electricity usage (specifically heating and cooling) would also give some fuzzy indications of people density. Telephony and internet records that certain three letter agencies are already collecting (with or without legislative approval) would be an even more accurate indicator. AI could then be used to “see the hidden patterns” in the data and blockchain could be used to store the results to avoid tampering by the most saintly auditing firms. With all the Orwellian technology already out there, the metrics to make such deductions accurately must already exist. The best method is always to follow the money (or utilities bills).

    • Daniel J Bjorndahl
      Jul 4, 2018 at 12:07 am

      There needs to be some gross commercial real estate number divided by utilized commercial real estate number

  12. Wisdom Seeker
    Jul 3, 2018 at 7:45 pm

    Wolf, I wonder if you’ve bought too heavily into the landlords’ framing of this issue? There’s no law that says that every retail building ever built has to be retail-occupied for eternity at eye-popping rent levels.

    Look at the retail sector by looking at the occupied stores’ retail space. (And then by sales per square foot, perhaps?) Total retail sales is doing fine, overall. Just not in some places. Because apparently the US has something like twice the retail space, per person, of most other developed countries. That’s too much and naturally the weaker stores and malls are going to be destroyed. But would having less retail space be such a bad thing in the long run? Anyway, vacant space seems like a poor metric for anything other than predicting trends in rents.

    Retail store jobs are generally low-end. Having fewer retailers, with more productive stores, would actually lead to improved job quality and pay for the workers in those stores. The workers in the closed stores will have to find new jobs, but at least jobs are not that hard to find right now. And the landlords would be able to earn higher rents from more productive stores as well.

    Conversely, if there’s a glut of mall space in a particular area, that’s beneficial for successful retail stores, since it means lower rents. So either those stores bring back higher profits for retailers, or they can pass on lower prices for customers. For the landlords, of course, low rents are not so positive. But I’m not pro-landlord.

    The big question is, how did retail in some places get so heavily overbuilt? It looks like a regional-patchwork problem, not a nationwide glut. The Amazon writing has been on the wall for a decade, so that can’t be the cause at this point. Poor planning and perverse incentives come to mind. What about the past 10 years’ insanely low interest rates? Did landowners drink too much Fed Kool-Aid? Did the rise of REITs as a “separate asset class” lead to over-investment by investors?

    The process of creative destruction is hard on those with vested interests, but it’s nothing new historically. Adverse economic trends and poor policies have swept through the country since before it was founded. Some places will be made great again, but it won’t be by returning to the past. Others will fade into history, and those who lived there will move on to new futures. This is painful for everyone, but it’s also part of the American way. Just ask the cowboys, the family farmers, the tradespeople displaced by railroads and automobiles and airplanes and computers.

    • mick
      Jul 3, 2018 at 8:35 pm

      Wisdom seeker, please seek some wisdom.
      2017 saw the most store closures in any year, and 2018 will surpass 2017.
      Framing this as just “creative destruction in action” belies an ignorance of stats and the facts

      • Michael Fiorillo
        Jul 4, 2018 at 10:49 am

        Yes, and wide-scale job losses in retail will automatically result in better job opportunities for displaced workers.

        Why? Because Markets…

      • Wisdom Seeker
        Jul 4, 2018 at 3:38 pm

        I understand that there are lot of half-empty (or abandoned) retail complexes occupied (or formerly occupied) by stores that no longer attract customers. Those malls and stores are dying, but Retail Sales as a whole are thriving. Retail Sales according to FRED is around $440 billion/month. It has been rising steadily since the end of the recession. SOMEONE is getting those sales. Retail as a whole ain’t dead, it’s overbuilt.

        https://fred.stlouisfed.org/graph/fredgraph.png?g=kl9q

        • Jul 5, 2018 at 12:26 am

          What you need to understand is that ONLINE retail sales are BOOMING, and that about half of brick-and-mortar sales are “online proof” for now and are doing pretty well (car dealers, groceries, alcohol, gasoline, etc., but that the other half of brick-and-mortar sales is getting CRUSHED. This other half includes most of the stores that are in malls, such as department stores, specialty apareal stores, and the like.

          Music stores are already dead. Toy stores are dying. Big-box book stores are dying (Borders is already dead, B&N is on the way), etc. They got killed by online retail.

          https://wolfstreet.com/2018/05/17/brick-mortar-meltdown-pummels-these-stores-the-most/

          And here is what is happening with jobs in brick and mortar retail (look at the last chart):

          https://wolfstreet.com/2018/05/17/brick-mortar-meltdown-pummels-these-stores-the-most/

        • Duke DeGuise
          Jul 5, 2018 at 10:40 am

          Thanks, it’s comforting to know that even though the patients are dying, the surgery is successful.

          So what if thousands of people lose their livelihoods? Jeff Bezos is richer every day, and can continue jerking off to his spaceship-to-Mars fantasies…

    • RepubAnon
      Jul 3, 2018 at 9:11 pm

      The problem is that Wall Street is currently selling derivatives of cowboy firms, family farmers, etc., to suckers. “Ripping the eyes out of Muppets” is the business model. Calling it “creative destruction” merely hides the fact that it is, indeed, destruction.

    • Lion
      Jul 3, 2018 at 9:48 pm

      To me there’s got to be huge “other” costs associated with these mall/store closings. For a long time retail jobs were, as many have said, the low end income jobs. But these provided opportunities for those without substantial education or decent part time work or 2nd jobs. Now this financial burden is falling more on the government and society. Yes retail sales are fine but the profits instead of getting distributed to some of those in lower income groups now reside with the 1%’s. And the income ripple effect these jobs had on local communities is drying up. What’s seems strange ? as much of these income gains should be going into the California Bay areas. But then you read about the high homeless and drug use there. I guess this last statement backs up the fact that the 1%’s also don’t like to share their wealth either.

      • alex in san jose AKA digital Detroit
        Jul 4, 2018 at 6:40 pm

        Set up a machine that’s designed to inherently concentrate wealth and then wonder why the machine (capitalism) is concentrating wealth Hmm….

    • Petunia
      Jul 4, 2018 at 9:53 am

      Retail got overbuilt with Wall St. money. All the expansion was based on a company’s ability to raise money in the financial markets and not on real sales. The higher the expansion rate, the higher the stock price of the chain.

      If you look at smaller cities in the US you will see they have many multiples of stores from any chain, more than any reasonable person would think is necessary. It was an unsustainable expansion.

  13. Tony of CA
    Jul 3, 2018 at 8:46 pm

    Jeez, this is all becoming such a farce. It’s similar to the official U3 unemployment rate which is quoted ad nauseam on tv. It excludes the 103 million Americans supposedly no longer looking for work. I will say it again. Our system completely collapsed in 2007!!! We have been holding it together with super cheap credit and statistical lies.

    • Daniel J Bjorndahl
      Jul 4, 2018 at 12:10 am

      Tony, I believe you have it correct, although we might have collapsed sooner than 07! but perhaps 07 was the flatline similar to a heart attack, where a lifetime of bad choices led to the ultimate cause of death. I think the end of the gold standard was the beginning of the end of the dollar-denominated US economy. ’07 should have been pronounced dead, as you called it. U3 is meaningless. Labor force participation rate speaks more honestly.

    • Frederick
      Jul 4, 2018 at 9:50 am

      Well said Tony It collapsed for me in 2008 but close enough I’m a lot happier now living on less but enjoying it more and most importantly living off the hampster wheel called New York living

  14. TempoNick
    Jul 3, 2018 at 9:21 pm

    I don’t know that I buy your premise. Obsolete retail space isn’t really retail space anymore. It is rightfully removed from the statistics just as junk cars are no longer counted once they go to the scrap yard.

    It’s too bad this space can’t be repurposed for entrepreneurs and small business people, but it’s just in the wrong configuration. It’s too big and it cost too much to convert to something else. There are exceptions, but tearing it down is probably the best thing to do.

    • Duke De Guise
      Jul 4, 2018 at 10:52 am

      Perhaps, but certainly some of them can be re-purposed to manufacture Soylent Green…

  15. michael
    Jul 3, 2018 at 10:08 pm

    “By removing vacant retail properties from the retail “vacancy” data because they’re no longer being marketed to potential retail tenants”

    I am pretty sure this tactic is being used on apartments as well. They keep building them but there does not seem to be a boom in listings.

    Interesting enough Sears annouced the closure of their store in the Newark Newpark mall in the last couple of days. They are in the process of expanding this mall. How they are going to fill those two stories of Sears is beyond me.

    Looks like to me reality is going to hit these places like a brick wall

    • phathalo
      Jul 4, 2018 at 9:46 am

      “… like a brick wall”
      I am disappointed in you!

  16. Harvey Darrow Cotton
    Jul 4, 2018 at 6:45 am

    I am 41 and there are strip malls and entire complexes that have been vacant in my city since my childhood. If you inquire about the rents, they have ludicrous valuations because the banks that own them do not want to devalue their assets. Depending on the industry, sales are supposed to be some fraction of the amount you pay on rent, and because everyone is incentivized to never come down on the price of commercial real estate, occupant after occupant fail in the same space – unable to generate the requesite sales. A greater proportion are also unwilling to sell individual lots to family-run start-ups, hoping to hit some kind of Wal-Mart / city gentrification lottery. I would wager that the bloated value of commercial real estate dwarfs the holdings of subprime mortgages during the financial crisis.

    • Wisdom Seeker
      Jul 4, 2018 at 3:04 pm

      This is a really interesting idea. Anyone have ideas where can we dig up data to substantiate it?

    • Jul 6, 2018 at 3:26 pm

      Interesting – it makes sense that legally fraudulent financial modeling has been driving crazy results for a long time.

      Back in 2009 the big turnaround and “recovery” followed the legal switch from “mark to market” to the previous “mark to model.”

      While valuing a billion dollar company based on the latest $5000 of shares sold makes no sense, they haven’t really looked into ways to make the models make sense either. It seems like they give too much leeway in this as long as the big auditing firms are paid to rubber-stamp it.

      The whole idea of GAAP “Generally Accepted Accounting Principals”, later replaced by FINRA, was to enforce valuations that make some level of financial sense.

      Earnings become irrelevant when you can value your business high and borrow for free. We badly need financial reform in this country, despite the inevitable writedowns it will require of the banks.

  17. Harvie
    Jul 4, 2018 at 8:32 am

    We had a Kmart (with a Sears Tire Center) that closed down about 4 years ago and within a year after was turned into; Moe’s, a nail salon, a T Mobile store, Buffalo Wild Wings, TJ Maxx (on the smaller side), and a Burlington Coat factory (also a bit on the smaller size compared to others) and it looks to be doing very well. There are always cars parked all over and I was actually happy to see new business growing there then the huge zombie KMart store. There’s already another one about 5 miles away…

  18. RD Blakeslee
    Jul 4, 2018 at 8:39 am

    The Magic Mart I know about was well stocked, had a broad array of merchandise and was in a small conglomeration of stores “anchored” by a continuing successful Krogers store. It sent out advertising inserts in local papers every week, which I found interesting because of their low prices.

    I used it when I had need of a product they stocked and when I was in the area, usually to buy foodstuffs at Krogers.

    There were earlier such stores, not so widely networked, that went out of business (with highly publicized complaints re the unfairness of their treatment by local pols), when WalMart arrived.

    These stores are being destroyed by the bigness per se of their major competitors.

    It’s just another manifestation of the ever-increasing, concentrated economic power held in fewer and fewer hands, worldwide.

  19. Petedivine
    Jul 4, 2018 at 8:49 am

    So who owns these ghost properties? Who maintains a vacant mall? Who lost the rental income? What about tax income to the municipality? Who is going to pay for destroying the mall and hauling away the debris?

    I’ve seen videos where millineals break into abandoned malls and turn them into skate parks for their YouTube videos. One clever guy even setup the mall’s Christmas village for his video. If you abandon a large building stray dogs, rats, and other critters move in. If you knock it down the bagholders have to take the full loss. I’m guessing the financials for these ghost centers are hidden within REITs which are consumed by pensions, insurance companies, and dividend seeking boomers,

    • Gershon
      Jul 4, 2018 at 10:41 am

      There’s a reason why malls figure so prominently in zombie movies like “Day of the Dead.” The lurching, mindless undead would naturally gravitate to such soulless places.

      • chris Hauser
        Jul 5, 2018 at 10:58 am

        zombies in malls are so…….yesterday.

        ah, nostalgia.

        but seriously, vacant and for rent and vacant and nobody will ever consider even going into it for free because it costs too much is the two ends of the spectrum.

        in warmer parts of the country, one could selectively break up asphalt parking lots and plant figs. they’ll thrive.

  20. Gershon
    Jul 4, 2018 at 9:10 am

    Off topic, but today will be the last day multiple morons still have ten fingers.

    • Duke DeGuise
      Jul 4, 2018 at 10:55 am

      Yes, there’s always a surge of new contestants for the Darwin Awards on July 4th…

    • Mean Chicken
      Jul 4, 2018 at 7:38 pm

      Considering that sparklers have been outlawed or detuned to the point they might be used to extinguish fires and real chemistry sets no longer exist for the purpose of teaching young ones how complex elastomers are formulated, it appears July 4th only serves as an excuse for millenial exstacy parties.

  21. Petunia
    Jul 4, 2018 at 9:40 am

    During the 70’s in NYC the printing industry, which occupied factory sized facilities in NYC buildings, collapsed due to digitization and left entire areas of SOHO abandoned. When the landlords realized printing was never coming back they rented out the space cheaply to artists, which began the loft living/working trend. It took over 20 years for that real estate to evolve from manufacturing, to cheap lofts, to high end residential. SOHO has been back now for 20 years in a different form.

    Landlords now are not allowing their properties to evolve because they are still waiting for a recovery that’s not going to happen to retail.

    • saylor
      Jul 4, 2018 at 1:00 pm

      Actually, I’d have to disagree with your time line as I worked in the 3rd party contract field of printing manuals, duplicating floppy disks and replicating (later on) CDs and DVD. The initial upsurge of computers was a major boon for the printing industry until well into the 90s. due to the demand for manuals. It started out with printing operations taking on the task of assembling the books and disks into a final package. I’d say the printing in NYC must have been affected by something else like high per sq.ft. costs.

      • Michael Fiorillo
        Jul 5, 2018 at 10:51 am

        Also, Soho was not the center of the printing industry; it was filled with small manufacturers and textile/garment remnants shops, who started abandoning the neighborhood in the early sixties, when the NYC printing industry was still doing well.

        The big print shops were on the Lower West Side, in an area the real estate brokers now call Hudson Square. You could smell the printer’s ink on the side streets there, and hear the giant presses running late at night. There were after-work softball leagues for the printers, and many times when I was a kid they’d let me play in the outfield late in the games.

        Hard to believe, but NYC, and Manhattan even, was once a working class town, and a much more interesting and affordable place because of it.

  22. LessonIsNeverTry
    Jul 4, 2018 at 10:29 am

    We are frequently in the Totem Lake area of Kirkland Washington. Something interesting is happening there. A previously dead mall, with all the symptoms and appearance of most failed malls across the US, is being razed and revamped into “The Village at Totem Lake”. It is one hell of a construction site. It will be fascinating to see if a high end redo will survive the forthcoming recession and the next ten years of the internet shopping takeover. Keep in mind that Amazon delivers many items in one hour in Kirkland and has access to Amazon Fresh.

    • TheDona
      Jul 4, 2018 at 11:18 am

      Much better than a mall. From their website: The Village at Totem Lake is the reimagining of Totem Lake with an exciting new lifestyle center with a village feel, mixed-use, gourmet grocery and other experiences. Refreshingly, the project feels like it should have been here all along.

      Guests will be pleased to discover a unique environment featuring retail, unique food offerings, creative offices, luxury residences, parks and plazas with fountains with local events and a state-of-the-art theatre.

      Residents will experience a highly desirable quality of life with unique experiences and conveniences that can’t be found elsewhere in the area.

      • LessonIsNeverTry
        Jul 4, 2018 at 12:33 pm

        Yep, you are 100% correct that it is different (and better) than a mall. I didn’t mean to give the impression that it was a new indoor mall on the ashes of the old, although I can definitely see why my post could be read that way.

        I’m fascinated to see if a new, high end retail oriented shopping area that re-uses the land from one of these beached whale malls will be successful. Over the mid term I mean. Short term the economy is so good on Eastside that it will be packed upon opening!

        • Jul 4, 2018 at 1:56 pm

          Mall sales (except restaurants) are in decline. Department store sales have been in decline since 2001. So every time a new mall is built and made exciting enough for people to show up and buy stuff, it will take away traffic and sales from other malls.

          This is a less-than-zero-sum game. If a mall like this is successful, it will hasten the demise of others.

        • Wisdom Seeker
          Jul 4, 2018 at 4:33 pm

          Wolf writes:
          1) Mall sales (except restaurants) are in decline.
          2) Department store sales have been in decline since 2001.
          3) So every time a new mall is built and made exciting enough for people to show up and buy stuff, it will take away traffic and sales from other malls.

          (3) Does not follow from (1) or (2). Traffic and sales are not immutable constants. Declining sales is not an inevitable fact of life (unless your business model sucks and you’re not competitive). And new development doesn’t need to (and shouldn’t!) follow the “mall” / “department store” business model.

          I suppose Wolf would also complain that we shouldn’t have any new restaurants, because they’ll force old restaurants out of business? Or that we shouldn’t have mobile phones, because phones include clocks and cameras, forcing the old clock, watch and camera makers out of business?

          People need food, they need to know what time it is, and they need to buy stuff, but that doesn’t mean that any given restaurant, timepiece or store is going to stay in business.

          Malls are dying because they don’t meet the needs of today’s consumers as well as other forms of retail. But in days gone by, the mom-and-pop general stores and specialty stores died at the hands of department stores and supermarkets. There was a lot of hand-wringing then as well, but nowadays everyone understands the advantages of supermarkets and department stores over the smaller specialty stores. Supermarkets and department stores saved their customers time and money getting many things they needed all in one place, and that’s why they got all the customers.

          The death of today’s outmoded retail stores isn’t all bad either – unless you’re a mall or department store owner incapable of delivering what today’s customers want better than your competition (hello, Eddie Lampert; hello, Toys ‘R’nt Us).

          Today, there are more ways than ever to get whatever stuff one needs. Very often it ain’t the best choice to spend hours driving to a mall, walking a mile or two trying to find the right thing, and then paying the bloated mall prices. If you’re already going to Walmart/Target and they’ve got what you need, you’re done. Why make another trip? Or, if you can get the same type of item online (and KNOW that the online store has it!), and the shipping cost is less than the gas and wear-and-tear from going to the mall, why waste time on a mall trip?

          Wolf writes “this is a less-than-zero-sum game”. But it doesn’t have to be. Let visionaries find new, better ways to meet the demands of the 2010s customer, and get mall owners to finally forget about the 1980s customer. Those who succeed will show the old mall owners what they need to do to start earning money off their old land.

          Meanwhile, instead of worrying about the new “taking traffic and sales away” from the old, I’d prefer to be investing in whatever is attracting traffic and sales.

          But I’d also like to see policymakers doing more to break up the sales-monopoly power of Walmart and Amazon, HomeLowe’s and so on. Rural and small-town residents in particular should not be at the mercy of a single chain. There’s a lot wrong in retail but the worst problem isn’t the overbuilding and resulting meltdown. It’s the destruction of consumer choice.

    • saylor
      Jul 4, 2018 at 1:03 pm

      The ‘mixed use’ developments do seem to be the current wave. Interesting that it replicates the very essence of small towns. It begs the question as to why the old downtown districts failed in the first place if that is the place we are now returning to in our social engineering.

      • Dan Romig
        Jul 5, 2018 at 6:58 am

        In 1956, Southdale Center shopping mall opened in Edina, MN ( an affluent first tier suburb of Minneapolis). It was the first fully enclosed, climate-controlled shopping mall in the US. Victor Gruen, the Austrian architect, wanted to challenge “car-centric” America by designing a communal gathering place where people would shop and socialize. The opposite thing happened though.

        Frank Lloyd Wright visited Southdale in November 1956 and stated, “The garden court has all the evils of the village street and none of the charm.” His comment on Gruen, “(he) should have left downtown, downtown.”

        Southdale had acres of car parking and was perfect for suburban America in its time.

        https://en.wikipedia.org/wiki/Southdale_Center

        In Minneapolis, there are a lot more residents living in the city center, and they don’t want to drive to do their shopping; hence the return to old downtown districts.

  23. Mean Chicken
    Jul 4, 2018 at 7:27 pm

    “those stores, many of them located in less than booming environments, will become vacant.”

    Are these the sea of irredeemables I was hearing so much about during the election?

  24. Tomonthebeach
    Jul 4, 2018 at 7:38 pm

    The death of strip malls is less worrisome than the death of megamalls whose top-name retailer giants like Sears and Macy’s are holding on by a leveraged thread.

    Many of the dying strip malls were built in the 60’s and not remodeled over time. Thus they are uninviting – ugly even. Also most strip malls were thrown up with little or no research, and over time, they became increasingly isolated from large retail clusters resulting in marginal renters. One such strip is just outside our upscale neighborhood on the beach. The last hold-out tenants were a vape shop, itinerant preacher, and a barbershop. Sound familiar? The owner will still profit from the value of the land, but surely has been seeing rents dry up since 2007.

  25. Laughing Eagle
    Jul 4, 2018 at 7:43 pm

    Wisdom Seeker. Amazon could be the entire retail market and the policy makers will not intervene. Have to have a TBTF retailer like our banks. I think that is why Bezos bought the Washington newspaper. Media controls populace and money influences D.C.

    • Timothy Hagios
      Jul 4, 2018 at 8:20 pm

      In addition to owning the Washington Post, Amazon has a couple collaborative projects going on with the CIA and the Pentagon. If that isn’t insurance from prosecution, I don’t know what it.

    • Wisdom Seeker
      Jul 4, 2018 at 9:59 pm

      Government lost its way with the TBTF nonsense. The architects of antitrust law are rolling over in their graves.

      But I think policy makers will eventually intervene, but only after voters unite to put their jobs on the line over the issue of consumer choice. I’d love to see that be part of the next wave of the populist revolt that brought Trump to power and has begun demolishing the establishment Democrats as well as the Republicans.

      I was horrified that Amazon was allowed to own the WaPo. Too many conflicts of interest there, as you mention. So now I don’t bother reading the WaPo, and I don’t think you should either. Media only has influence if they have an audience / readership.

      However, that doesn’t change the underlying point that Amazon-style online sales is superior to the go-to-the-mall approach, for a wide range of products. A big mystery why no one else has matched their successful approach. But there are plenty of retail items where in-person shopping will generally beat online shopping.

    • Guido
      Jul 5, 2018 at 3:11 pm

      Walmart should have seen this coming about a decade ago. They had the money to buy a major newspaper, even wapo, and done the things amazon is doing today. Now, late in the game, they’re all trying to give free delivery, open their inventories on the web, and even offer free curbside pick up. These guys used my grandfather’s book of improving sales while amazon was thinking. You know the stuff about loss leaders etc. What was amazon thinking? Make everything a loss leader.

      To me, it looks like Amazon plays its game strategically while the others are busy…wait for it… reading wapo.

  26. R Davis
    Jul 5, 2018 at 5:12 pm

    ‘zombie mall space remaining shuttered for years”

    Would it make any sense to give over unused space to community activities = a charitable donation & could that be classes as a tax deduction ??
    Filling space & bringing in the customer.
    Thrift shops are always doing business, cheap eats – downgrade a little = go with the flow = bend with the wind.

  27. R Davis
    Jul 5, 2018 at 5:20 pm

    10 years ago I volunteered 2 day at a thrift shop – there was a paid manager & cashier, an old guy who also volunteered 2, 1/2 days.
    The place was just a bit neglected, I put on a happy friendly & talkative face for the customers, cleaned up, got stock out into the shop, books in category order, within a few months our sales tripled.

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